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Blog of Mass Destruction

Being Hedged Into Poverty

By The Reverend Published: October 20, 2007

UPDATE BELOW:

Gasoline prices locally have moved form $2.59 up to $2.89 recently despite supplies rising nationally. Crude oil has set five new highs recently despite the fact that supplies are...umm...rising.

What gives?

While oil prices have risen sharply in recent days, the weak U.S. dollar is seen as somewhat moderating the impact of high oil prices in other currencies.

So those who use, like, foreign currency, are smiling. Anyone you know buy gas and stuff with foreign currency? Well at least everyone but America gets a better deal, so I suppose it's a trade off.

Analysts said investors were also buying more oil to hedge further losses in the currency.

"The main way the weak U.S. dollar is actually relevant to oil and possibly other commodities such as gold, is that you may have seen some investment in those commodities as a hedge against U.S. dollar weakness and that has pushed up their price," said David Moore, commodity strategist at the Commonwealth Bank of Australia in Sydney.

Very rich people who have enough "investment" money to own continents are "hedging" their bets in the mighty Wall Street Casino. They are moving they're "investments" into the Oil Game.

The Oil "hedge" Game has a consequence for the little people. They will have to pay more for energy just at a time when their buying power is declining.

Vienna's PVM Oil Associates said the surge "cannot be fully explained by market fundamentals, as the related factors are generally more bearish than bullish."

Data released in recent weeks shows speculative buying of oil futures is on the rise. Link

When "market fundamentals" don't bear up at oil's high levels, a "bubble" is being created by "speculative" buying. All for the sake of those rich people "hedging" their "investments".

This, by the way, is what the Republican Party has in mind for Social Security. They want a portion of our payroll deduction placed into the stock market, inflating artificially, stock values.....voila, new bubble to be "hedged" back down for profits, sh*ts and giggles.

We're being "hedged" into a lower standard of living by rich people gambling with their "investments".

We are still in the middle of the "hedging" meltdown where "investors" using questionable mortgage bundles as collateral to gamble with, suddenly found themselves undercollateralized which prompted margin calls. Stocks were sold to satisfy the calls and 1000 points was taken off the DOW. Working Americans who had IRA and 401K money in DOW related paper lost out.

It has become the norm now in America.

We're being hedged by gamblers into poverty.

UPDATE: Go here to see a chart of the increased margin debt with rich Wall Street investors. Good written piece too.

I'm sticking to my March recession prediction. The monied boys and the GOP crooks will hand the Democrats a quagmire in Iraq, a recession here at home and a cranky electorate.... and then they will ask the Dems, "Why did you let this happen?". The Knee Padders will echo the question ad infinitum. I've seen this movie before.

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