Role of the Speculator

I tore into David Leonhardt’s article, expecting some examination of the competing philosophies attempt to define the current Recession, if it exists. I found a ‘wringing of hands’ over the bad Job Reports, and a denial of Price manipulation by Speculators. David mentions Labor Dept. Tracking of ‘gross job losses’. I could mention that American Business has been cutting the fat from the Job Rolls since the Reagan administration, and this elimination by itself never achieved any Profits improvement. I also know for a fact that there is over 16 times the Speculator Cash in the Oil markets than there was in 2003, and all this Cash is making at least a 8% Profit on every Dollar, else the Cash would still be in the Stock Market. The creation of a new ‘middleman’ position within an established Market may not seem like a Price manipulation to some Economists, but that is a lot of Salary, Bonus, and Dividend Checks to pay for on the bottom line.

I ran across this address to Creative Capitalism, which I suspicion may devolve into a PR hotbed, protecting the delicate Flowers of American Capitalism who happen to be billionaires. The exact position of Bill Gates stands as a Object of Debate. I myself think that Bill went from paying himself to run a Business, to paying himself to manage his own money; likewise for family members and friends, all for a Dispersal Rate rarely in excess of an ordinary Capital Gains taxation if he paid it. The Gates’ Tendency has caught on rapidly with some of the other ordinary billionaires.

Political Calculations states that China is burning up the Commodities, a view which is enticing even if erroneous; simple economic lesson: the Commodity Price leader cannot individually maintain their Consumption, they require the involvement of exterior Investment to sustain the expansion. I would not call China innocent, but Speculators are again the culprit, who are looking for the quick, rollover Profits. These Speculators can consist of Anyone–foreign Governments, sound Central banks, Sovereign Wealth Funds, or Joe Six-Pack sitting in the local bar utterly dependent on some Hedge fund operator. What is the Driving Force behind them all? The Expectation that Production Startup Costs in developed economies are too high to generate Profitability of Enterprise. They all hope that the Wildcatting Business practice of undeveloped economies will pick up high Cash value. lgl