Friday, May 30, 2008

Commodities as WMDs

A "rogue state" (or consortium of rogue states) , emboldened by recent economic weakness in the United States, have designed weapons that will pressure the Capitalist Pigs/Infidels/Superpower to the point of eventual capitulation and outright subjugation.

These weapons are called "commodities" the most important of which is known as "oil". These deadly weapons operate in the following way: Their prices rise forever, starving the west of energy, food, and high quality chocolate.

The U.S. has deftly identified this threat and is sending their best agents to investigate and attempt to defuse these WMDs. The men and women of the United States "Commodity Aggregate Demand Destruction Organization" or "CAN-DO" will not find this easy. Their mission will take them from the Great Steppe to the Arabian Desert to the Equatorial Jungles of South America. They will eschew danger and bravely step onto their private jets, eat at the best restaurants at the Burj Al Arab, and discuss America's position over cocktails until those prices come down.

The above "movie script" type of treatment contains some grains of truth. In the case of oil, political and speculative forces (speculative defined as trend followers buying because the price is going higher along with the long-only passive commodity funds) have, in my opinion, put a wedge between true supply and true demand.

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