Roland Dürre
Friday November 21st, 2008

Of Beloved Money and Nice Oil – Vivat Speculation!

Of Beloved Money and Nice Oil – Vivat Speculation!
A few weeks ago, listening to a talk by Franz-Josef Bierbrauer, I heard that only about 2% of all commerce with Euros and Dollars is actual exchange of products. The remaining 98% of the world-wide currency volume is exclusively executed through speculation! I have not done any research on the numbers myself; I am prepared to just believe Herrn Bierbrauer. What is more:

🙂 The number is a perfect match with my pre-conceived prejudices…
In my mind, speculation works as follows: there is a heavy pendulum hanging from the ceiling. There are two groups of people: one group tries with all its strength to get the pendulum to swing in one direction. During the process, the individual members of the group even dynamically change membership. As soon as the pendulum has reached the uppermost point on one end and it gets hard to reach it, it starts swinging in the opposite direction. The other group gains more and more and there comes a time when the pendulum is on a maximum at the opposite end. Thus, it swings to and fro, but you never know when it is at its maximum and therefore will reverse its course. The process can take months, years, or even decades.
As the pendulum swings to and fro, so the currency course goes up and down. And all participants of the game want to cash in on it. However, since it is a game of numbers, the amount you can “earn” has to be “lost” elsewhere. And because of additional fees, it is not even a game of numbers. Some increase the additional costs by speculating with borrowed capital, which means they have to pay interest. From the perspective of value increase, the entire game seems pointless. It can only be beneficial to participants who are wiser (?) than others, much luckier (?) than others, or capable of manipulating successfully(!).

Now I would like to know: what is the situation with oil? How much of the world-wide oil actually gets to the consumer for burning or use? Maybe one of the readers of this article can answer that question?
I can easily imaging that – like with currency – the actual amount of oil used is just a small percentage of the entire exchange volume. Then I would finally understand why the price of oil has as little to do with the real value of oil (if such can be determined at all) or with scenarios like the “oil peak” as currency value has to do with its purchasing power.
That would also be a kind of “virtualisation”!
RMD (translated by Evelyn Gemkow)

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