Ron2008

World Recovery Is in the Hands of OPEC

The problem is you are treating oil as an asset class and not a commodity. Thus more dollars are chasing to the long side of oil than normally would.

If all of the specs who wanted to preserve the value of their wealth would buy precious metals, then you would have your safe haven and the economy wouldn't be ruined by the specs buying a commodity that affects the world to such a huge extent.

I hope you realize how big a "tax" the inflated prices of oil and gasoline, caused by your speculation, are to the US economy.

The US uses about 14 million barrels of oil a day, right now. If there is $20 of spec premium added to the price, that is a $280 million dollar per day "tax". $8.4 billion a month. $102 billion a year.

By speculating to preserve your wealth, you are on the other hand causing the price of everything you purchase to cost more. Are you really gaining anything?

On Oct 25 10:40 PM derryl wrote:

> The "wall of liquidity" that is chasing all asset classes, including
> commodities like oil, is interested not only and often not even primarily
> in making speculative gains. A lot of this money is just pension
> funds and ETF retail investors like you and me trying to preserve
> the value of our wealth as the dollar devalues. Yes this 'speculative'
> money holds the price of oil higher than oil market supply and demand
> would indicate, but how do you tell all those people that you're
> not allowing them to put their wealth into commodities to preserve
> it against devaluation? (I own oil stocks but not ETFs, though I
> sympathize with ETF commodity 'speculators')

Stocks, Bonds, Commodities and Currencies: My Predictions for 2009

To have inflation you have to have demand. With unemployment soaring, demand will take a long time to show up.

The housing market will never have the demand of a few of years ago because subprime mortgages won't be handed out like candy again.