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Reply #55: I tried to point that out at the time [View All]

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Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-15-11 09:55 PM
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55. I tried to point that out at the time
that commodities bubbles were being created in all sorts of commodities by the big investment banks and hedge funds because commodities were relatively easy to manipulate, especially once Phil Gramm changed the rules.

I've disagreed with Krugman over the past year because this present crop of commodities bubbles are following the same damned pattern the last one did. Krugman denies it's taking place. I know it is from watching the patterns of large amounts of money in and how it's also taken out.

The problem is that commodities prices are being manipulated worldwide, increasing the costs of such staple foodstuffs as rice and wheat. The price bubbles are largely the cause of the Arab Spring. Populations had put up with brutal regimes for the sake of order until food prices went through the roof. Add hunger to repression and you get revolution.

The Koch boys were some of the smaller players in this, actually. The big banks had much larger positions in this stuff. Together, they created bubble markets.

The psychology behind a bubble market has the small fish rushing in as it's being noticed and the big fish use that opportunity to pull out with their profits. Then the small fish lose their shirts when the price corrects without all the big money inflating it. It's how the last vestiges of wealth are generally bled off the upper middle class.

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