War Declared On Commodities

In case you missed the memo, let me pass on the word to you. The U.S. Government wants lower commodity prices.

They want them, and they shall have them.

Let’s just recap, shall we?

First, the PM exchanges raise margin requirements, effectively ape raping silver prices and flushing out the space, much to the cheers of the Tech space.

Next, legislators make much racket about defunding ethanol, sending corn prices into a downward spiral.

Then, just today, the IEA opens the doors to the SPR, announcing they’ll release 60M barrels of oil, causing the price of oil to get fucked over a barrel, sideways.

Am I missing anything?

I’m not going to be tactful about this. If you are long commodities right now, spouting shit about the dollar, Bernanke, and the end of the world, you must be some kind of fucking crazy person. That is the only way I can explain such erratic behavior, as hanging out in markets that the government is intentionally trying to burn to the ground.

Complain all you want about how this will have long term ramifications. You’re right, but public officials obviously don’t care.

They want lower prices to take the heat off the poor. Since this task isn’t going to be accomplished through real demand decreasing, then they will artificially lower demand, by blowing up every five and six figure futures account that gets in their way.

This policy can be summed up in kind:

Bureaucrats enjoy picking losers as much as they enjoy picking winners.

As if I didn’t provide enough reasons for getting out of the commodity trade, here’s another. You’re fighting a semi-sentient, loosely organized, and massively funded organization that is trying to make you lose.

Don’t be dumb.

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