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Living off Misery August 30, 2008

Posted by virtualkey08 in Uncategorized.
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With oil prices still sky high, and the price of just about everything through the roof, I had to sit and wonder how anyone with less than a 6 figure salary could even cope.  I look at my electric bill that only 2  months ago was 150 dollars, and now, same amount of usage is topping 380.  I look at my fridge, which used to be laden with good French insant coffies and exotic foods, and is now down to whatever I can find on sale, not to say I still don’t eat well, I do, just differently.  I don’t drive as much as I used to, my car is a gas hog, and quite honestly I don’t very much like having to spend 80 bucks every time I fill up.  Such is life, right?

Wrong.

The other night I had the extreme displeasure of having dinner with a gentleman, and I use the term losely, who makes his living off of buying and trading futures.  Futures, for the unenlightened like myself, are the buying and selling of product, based upon what the price may be sometime later.  Sounds fun?

Well, think of it this way.  It’s sort of like betting.  If you buy low, and sell high, you make profit, and on tangeble items youo can do that easily and with some satisfaction that the item actually exists.

Futures, however, rely on blind faith, and the public not really understanding what’s going on.  Take for example the biggie right now Oil.  A barrell of oil is a tangeble item, it has mass, it has volume and most of all you can touch and feel it.  That barrell of unrefined crude is then sent to a facility and made into whatever needs to be made from it, be it gasolene or vasolene.  An oil future, however, is a bet made on the price say 3 months from now, when production may be lower, or some unforeseen circumstance, oh say war in Iran, could drive the supply down.  There aren’t really any barrels of oil, it’s all guesstimates on what MAY be there.

So these futures traders actually determine months ahead of time what the price of your oil will be.  And if the futures go up in price, instead of waiting until the oil actually hits that price, places like gas stations and supermarkets raise thier prices in anticipation of that which is yet to come.  Problem is, when the price goes down on the oil, it takes a disproportionate amount of time for the price of everything else to drop, which again drives the oil futures higher, and again drives your prices higher.

So who benefits you ask.  The commodities traders and OPEC.  OPEC because they pretty much can shut off the flow at any point they dont’ feel they are done lining their pockets with gold, and the traders, ohh the traders.  Since no real money is at stake, and everything is done on credit, the commodoties brokers rake in the comissions and fees, while not  really having to expose themselves to the risk of bankruptcy, or so it was explained to me, and thereby they line their pockets with the sweat of the working class that has to pay higher prices to drive to work.  And most are proud of themselves.

Working at a job where you trample the people to make yourself rich.  And I wonder why this trader has trouble sleeping atn night.

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Comments»

1. Joe Blohe - October 6, 2008

I actually pity the poor guy. You probably chewed his ear off with feminist rantings all night long.

2. virtualkey08 - October 7, 2008

I would like anyone to point out where in that post is anything remotely feminist?


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