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MrRodgers -> RE: Tax havens could be on the way out (9/20/2016 9:50:03 PM)
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ORIGINAL: DesideriScuri
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ORIGINAL: MrRodgers
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ORIGINAL: DesideriScuri
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ORIGINAL: MrRodgers
Interest rates we essentially agree on but there haven't been a wide swings in them or inflation. So the fed rate is a dull blunt intrument for economic adjustment.
2% (goal) inflation might not be a "wide swing," but compounded yearly, sure does add up, no?
All interest adds up and 2% we have to admit is at or about 50-60 year lows. Yes, before the fed there was almost no inflation but society wasn't subject to such speculation in commodities that society is now as John Adams warned way back...slave to.
So, speculation in commodities is what is causing inflation? I agree it has an effect, but I do think a much larger impact is Fed policy.
Any ideas on how to stop speculation?
Yea, disincentives. Tax it. Tax all paper-trading that serves no economic purpose.
But except as I wrote, such 'paper' as it were, needed for real start-ups. The whole original economic theory being selling stock (a piece of ownership) was to raise debt-free capital. (the real economic benefit of which is again...start-ups, i.e., new jobs)
Now with online and especially speed trading, it is all purely and merely, extremely short term profits. Many economists write now that far too much capital that could be put to better use, is tied up looking for quick financial profits. GE for example and now for years, makes more money in financial transactions, than on actually building something.
Here's yet another example. Recall when oil took off. 1st qtr of that year, futures in oil went from about typically $80 billion to $280 billion and mainly because the oil cos. had to jump in.
APRIL 10, 2012
They should be banned from the world’s commodity exchanges, which could drive down the price of oil by as much as 40 percent and the price of gasoline by as much as $1 a gallon.
According to Congressional testimony by the commodities specialist Michael W. Masters in 2009, the oil futures markets routinely trade more than one billion barrels of oil per day. Given that the entire world produces only around 85 million actual “wet” barrels a day, this means that more than 90 percent of trading involves speculators’ exchanging “paper” barrels with one another.
Pure speculators account for as much as 40 percent of that high price, according to testimony that Rex Tillerson, the chief executive of ExxonMobil, gave to Congress last year. That estimate is bolstered by a recent report from the Federal Reserve Bank of St. Louis.
Congress was jolted into action when it learned of the full extent of Commodity Futures Trading Commission’s lax oversight. In the wake of the economic crisis, the Dodd-Frank Wall Street reform law required greater trading transparency and limited speculators who lacked a legitimate business-hedging purpose to positions of no greater than 25 percent of the futures market.
Still not enough.
HERE
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