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General Congreve

Channel 4 Report On Commodity Inflation

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Another poster posted a thread alerting everyone this report was on TV a couple of nights ago, missed it at the time and the thread didn't generate much discussion (IIRC), but have just found it on Youtube and it makes me exceptionally angry, so have felt the need to post the link:

They blame the whole thing on evil speculators and then interview the MPC who look all shocked and say the matter is being investigated and they will come up with some recommendations - yeah, like capital controls I expect!

Flippin' hell, the whole thing is a joke, not once is the obvious link between money printing and inflation even alluded too, it's all those evil speculators fault! The comments on the vid are priceless, at least there's others in the world that recognise this piece of sh1t report for what it is.

Judging from this sort of propaganda I wouldn't delay in buying some PHYSICAL metals if you have been considering it, because it won't be long before they stop EVIL SPECULATORS from buying them.

Edited by General Congreve

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Another poster posted a thread alerting everyone this report was on TV a couple of nights ago, missed it at the time and the thread didn't generate much discussion (IIRC), but have just found it on Youtube and it makes me exceptionally angry, so have felt the need to post the link:

They blame the whole thing on evil speculators and then interview the MPC who look all shocked and say the matter is being investigated and they will come up with some recommendations - yeah, like capital controls I expect!

Flippin' hell, the whole thing is a joke, not once is the obvious link between money printing and inflation even alluded too, it's all those evil speculators fault! The comments on the vid are priceless, at least there's others in the world that recognise this piece of sh1t report for what it is.

Judging from this sort of propaganda I wouldn't delay in buying some PHYSICAL metals if you have been considering it, because it won't be long before they stop EVIL SPECULATORS from buying them.

Here's the accompanying blog post, GC. Comments allowed :P

http://blogs.channel4.com/faisal-islam-on-economics/starbucks-boss-speculators-are-cashing-in-on-high-food-prices/14199

Edited by cheeznbreed

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Judging from this sort of propaganda I wouldn't delay in buying some PHYSICAL metals if you have been considering it, because it won't be long before they stop EVIL SPECULATORS from buying them.

Speculating in precious metals is a harmless pursuit. It denies nobody a roof over their head or food on the table.

PM speculation should be promoted as the ethical alternative to Wheat, Oil, Rice etc.

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Speculating in precious metals is a harmless pursuit. It denies nobody a roof over their head or food on the table.

PM speculation should be promoted as the ethical alternative to Wheat, Oil, Rice etc.

Obviously I concur, if there is any confusion for guest readers then my EVIL SPECULATORS line should be taken with a 100 tonne pinch of salt.

I shouldn't be angry at the Boe/Channel 4 really, all they are doing is providing/aiding and abetting one of the greatest wealth transfer opportunities of a lifetime, from those who hold it in paper to those that hold it in physical assets, most importantly precious metals.

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Another poster posted a thread alerting everyone this report was on TV a couple of nights ago, missed it at the time and the thread didn't generate much discussion (IIRC), but have just found it on Youtube and it makes me exceptionally angry, so have felt the need to post the link:

They blame the whole thing on evil speculators and then interview the MPC who look all shocked and say the matter is being investigated and they will come up with some recommendations - yeah, like capital controls I expect!

Flippin' hell, the whole thing is a joke, not once is the obvious link between money printing and inflation even alluded too, it's all those evil speculators fault! The comments on the vid are priceless, at least there's others in the world that recognise this piece of sh1t report for what it is.

Judging from this sort of propaganda I wouldn't delay in buying some PHYSICAL metals if you have been considering it, because it won't be long before they stop EVIL SPECULATORS from buying them.

Quite right sir

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Cheers for the heads up, would love to give them my 2 pence worth, especially in light of the two dunderhead comments that are already on there. However, you can call me paranoid, but I'm not overly keen on drawing attention to my views on an MSM website that requires my email address! <_<

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I heard a brief piece on R4 the other day, when they sent one of their intrepid reporters into the Baltic Exchange.

She spoke with various people in a sort of "gosh, that's amazing" way. When she asked about the rise in commodity prices, she got the answer that it was all about demand from growing economies, and that food production would have to double by 2050. She accepted this without question and was sent on her way with a pat on the head.

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They blame the whole thing on evil speculators and then interview the MPC who look all shocked and say the matter is being investigated and they will come up with some recommendations - yeah, like capital controls I expect!

Isn't there a measure of truth in this? To put it another way, most bubbles arise from genuine demand which then transforms into speculation. Inflation just encourages this activity.

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Cheers for the heads up, would love to give them my 2 pence worth, especially in light of the two dunderhead comments that are already on there. However, you can call me paranoid, but I'm not overly keen on drawing attention to my views on an MSM website that requires my email address! <_<

Fair dos. I sent a comment, but it appears to have failed the moderation test so far...

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I heard a brief piece on R4 the other day, when they sent one of their intrepid reporters into the Baltic Exchange.

She spoke with various people in a sort of "gosh, that's amazing" way. When she asked about the rise in commodity prices, she got the answer that it was all about demand from growing economies, and that food production would have to double by 2050. She accepted this without question and was sent on her way with a pat on the head.

i think thats sort of true, whether the govt prints money or let the banks fail and printed the money to make good on depositor guarantees, or had the money to make good on guarantees without printing GDP would fall off a cliff reducing salaries, one way or the other i dont think it matters, the imported deflation of the last few decades in goods is starting to reverse its cycle and essentials will increase as a percentage of disposable income moneyprinting or not. The ultimate rebalancing needs to come and will likely come via deflation in other debt purchased costs to neutralise this.

Edited by georgia o'keeffe

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Isn't there a measure of truth in this? To put it another way, most bubbles arise from genuine demand which then transforms into speculation. Inflation just encourages this activity.

You give a can of petrol to a pyromaniac and you can tell what will happen next.

Yes, the speculators are to blame but their effect would only be temporary without inflationary policies.

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i think thats sort of true, whether the govt prints money or let the banks fail and printed the money to make good on depositor guarantees, or had the money to make good on guarantees without printing GDP would fall off a cliff reducing salaries, one way or the other i dont think it matters, the imported deflation of the last few decades in goods is starting to reverse its cycle and essentials will increase as a percentage of disposable income moneyprinting or not. The ultimate rebalancing needs to come and will likely come via deflation in other debt based costs to neutralise this.

I don't doubt it long term, particularly on food - but not a single question about the short term ramp up.

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Isn't there a measure of truth in this? To put it another way, most bubbles arise from genuine demand which then transforms into speculation. Inflation just encourages this activity.

You are correct and I'm sure there is more than a grain of truth in the developing world growth story increasing demand and people jumping on 'the next big investment story' bandwagon. However, the increases we are seeing and the rate at which they are occurring, suspiciously seem to match the rate at which new money is being created.

It is no different to the same way the housing boom suspiciously seemed to be in lock step with all the new loans the banks created. Without the banks going over 3x income loans with 20% down or whatever, the pace of house price inflation would have been far, far slower, after all, people's salaries didn't double in the same time house prices did. Same rules apply here.

Edited by General Congreve

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Worrying numbers of 'investors' in this country still regard property as the best bet. This is another reason why we need an IR hike, to get people unfamiliar with commodities to park their money back into saving accounts rather than BTL speculation!

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Cheers for the heads up, would love to give them my 2 pence worth, especially in light of the two dunderhead comments that are already on there. However, you can call me paranoid, but I'm not overly keen on drawing attention to my views on an MSM website that requires my email address! <_<

Here's what I posted;-

Oh yes, it's all the fault of the evil speculators!

It has absolutely nothing to do with central banks crashing the interest rates in order to print the billions needed to cover their political masters immediate budget deficits and long term debt liabilities.

Who would have thought that increasing the base money supply, which has all now been leveraged up and has been naturally plowed into commodities in the desperate hunt for a positive rate of return would be inflationary? ( That's what all the recent margin hikes have been trying to curb)

I mean, there can't possibly be a connection between the printing of billions by the bank of England a couple of years ago and the rapidly increasing rates of inflation can there ?

Any Government that relies on deficit spending will always bail out the banks (and high finance) , as they are the only ones who can actually buy Govt debt. The Government by bailing out the banks, were actually bailing themselves out, using your money. Remember that.

Mervin King just wants to kick the can down the road just long enough for him to collect his index linked pension.

Do not be misdirected as to who are the real instigators of this crisis are.

I think that just about covers it

It's "awating moderation", let's see if they pubish it.

Edited by Jack's Creation

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Here's what I posted;-

Oh yes, it's all the fault of the evil speculators!

It has absolutely nothing to do with central banks crashing the interest rates in order to print the billions needed to cover their political masters immediate budget deficits and long term debt liabilities.

Who would have thought that increasing the base money supply, which has all now been leveraged up and has been naturally plowed into commodities in the desperate hunt for a positive rate of return would be inflationary? ( That's what all the recent margin hikes have been trying to curb)

I mean, there can't possibly be a connection between the printing of billions by the bank of England a couple of years ago and the rapidly increasing rates of inflation can there ?

Any Government that relies on deficit spending will always bail out the banks (and high finance) , as they are the only ones who can actually buy Govt debt. The Government by bailing out the banks, were actually bailing themselves out, using your money. Remember that.

Mervin King just wants to kick the can down the road just long enough for him to collect his index linked pension.

Do not be misdirected as to who are the real instigators of this crisis are.

I think that just about covers it

It's "awating moderation", let's see if they pubish it.

Good summary for the economically literate. Is it likely to impact the less knowing though?

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I think that just about covers it

It's "awating moderation", let's see if they pubish it.

What you didn't cover was Starbucks failure to hedge against coffee prices going against them? |I would have thought this was a no brainer for a company so heavily dependent on a particular speculated commodity such as coffee.

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What you didn't cover was Starbucks failure to hedge against coffee prices going against them? |I would have thought this was a no brainer for a company so heavily dependent on a particular speculated commodity such as coffee.

You'd have thought that would have been the case. A series of structured derivatives would have covered them. I would be genuinely surprised if they didn't have this in place. I suspect the wingeing is just a PR cover story to stop the franchaisee's spotting that what appears to be an increase in coffee prices being passed on to them is actually just an increase in parent company price gouging and profiteering.

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You are correct and I'm sure there is more than a grain of truth in the developing world growth story increasing demand and people jumping on 'the next big investment story' bandwagon. However, the increases we are seeing and the rate at which they are occurring, suspiciously seem to match the rate at which new money is being created.

It is no different to the same way the housing boom suspiciously seemed to be in lock step with all the new loans the banks created. Without the banks going over 3x income loans with 20% down or whatever, the pace of house price inflation would have been far, far slower, after all, people's salaries didn't double in the same time house prices did. Same rules apply here.

You mean there's going to be a commodity price crash?

Well yes of course. China can't keep printing money to maintain their currency peg forever now can they. At some point their tightening must actually work and cause demand to fall. Silver is a tiny market/extreme volatility example of the outcome.

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Here's what I posted;-

Oh yes, it's all the fault of the evil speculators!

It has absolutely nothing to do with central banks crashing the interest rates in order to print the billions needed to cover their political masters immediate budget deficits and long term debt liabilities.

Who would have thought that increasing the base money supply, which has all now been leveraged up and has been naturally plowed into commodities in the desperate hunt for a positive rate of return would be inflationary? ( That's what all the recent margin hikes have been trying to curb)

I mean, there can't possibly be a connection between the printing of billions by the bank of England a couple of years ago and the rapidly increasing rates of inflation can there ?

Any Government that relies on deficit spending will always bail out the banks (and high finance) , as they are the only ones who can actually buy Govt debt. The Government by bailing out the banks, were actually bailing themselves out, using your money. Remember that.

Mervin King just wants to kick the can down the road just long enough for him to collect his index linked pension.

Do not be misdirected as to who are the real instigators of this crisis are.

I think that just about covers it

It's "awating moderation", let's see if they pubish it.

Kudos to Channel 4, they published in full. Other readers comments followed pretty much the same line.

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You mean there's going to be a commodity price crash?

Well yes of course. China can't keep printing money to maintain their currency peg forever now can they. At some point their tightening must actually work and cause demand to fall. Silver is a tiny market/extreme volatility example of the outcome.

As I said, same rules apply.

House prices are due to correct because the extra mortgage leverage that was continually ratcheted up by the banks that created the boom has now disappeared.

Shut off the easy money and commodities will level off and/or fall back, keep QEing and ZIRPing and they will continue to rise.

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I would argue it is slightly different from the more money = higher prices slant you favour General Sir.

I would say it is more to do with excess money plus very low interest rates which makes both the carrying of leverage cheap and the hunt for a return even more urgent. If yields tend to zero, everyone starts to hitch rides on capital moves.

Speculation starts out as a tax on 'consumption' by withholding stocks from the market thereby pushing prices up to the next purcchasers of the commodity - in the end, the real consumer. If the real consumer's appetite is impacted by the high prices then stock carrying rises even more quickly. Eventually all the speculators begin to worry about this and the 'bubble' collapses in on itself as the trend reverses.

Another way bubbles can collapse is if the market has sent the wrong price signals to industry and more of the product is created by the addition of capacity.

The third way a bubble can collapse is if the carrying cost of leverage and/or stocks rises and/or credit is withdrawn (e.g. margin calls, credit rsik tightening).

With free money sloshing around, I would say our money supply is little like the old ro-ro car ferries with no septa to stop water from capsizing the ship if the hull is damaged. And we all know what happened to the Herald of Free Enterprise. The lurches become ever more extreme and over we go.

Good Alphaville articles here on stock levels etc....

http://ftalphaville....in-commodities/

http://ftalphaville....ts-are-falling/

And on debt and margin calls...

http://ftalphaville....nd-margin-debt/

http://ftalphaville....commods-mayhem/

So not necessarily higher over the long term, but more volatile. Hence the 'volaflation' we are experiencing where the central banks seem unable to deal with it.

Good post. To summarise I would say that the purely speculative part of price rises can be taken out of the equation by the reasons you list. However, inflationary increases won't be.

For example, in 1971 gold was $35/Oz, by 1980 it hit $850 before crashing back to $450 (initially) and entering a 20 year bear market. It was a big drop and one that was the result of real interest rates turning positive, which sucked out a lot of speculative money. However, $450 is a long way above $35, a level gold has never sunk anywhere near since. Why? Because the first few 100 dollars of the gold price increase in the 70's was purely as a result of dollar devaluation, not speculation.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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