Crunk Times, My friend.....Crunk Times

[iceteebone 5,000+ posts]

My little Saturn gets good gas mileage //content.invisioncic.com/y282845/emoticons/smile.gif.1ebc41e1811405b213edfc4622c41e27.gif

 

[Chevillac 5,000+ posts]

There are two competing theories on the sharp increase in gas prices.
1) Speculation...plain and simple. Hedge funds flush with cash are buying contracts hoping someone will pay more in the future. Instead of a home, people are flipping 10,000 barrels of oil. Easy enough to understand. This will cause a bubble and then fallout. I am trying to do a pretty good analysis to determine when that will be so I can start shorting oil. (The opposite side of transaction. I sell now, hoping to buy back later cheaper)

2) The devaluation of the $ compared to the euro. As the Asian countries begin to diversify out of dollar and into euro, dollar decrease and euro increase....what is problematic is that the price of oil is denominated in dollar....so when the world buys oil, it is cheaper (due to devaluation of dollar)...but conversely the arabs can buy less with this dollar...because it is worth less....so what can you do? Restrict supply to increase the price of oil to compensate for losses on the devaluation of the dollar.

Number 2 is a conspiracy theory but the math works to be true. So you can use the forward market of $/to euro to see the direction of gas prices.

People thing in June 08...the govt will do something about the falling dollar. They aren't going to do anything now because it gives a small boost to domestic economy. (cheap dollar makes imported goods more expensive and our goods cheaper to foreigners)...when/if govt intervenes the dollar will rise and gas prices will fall...if nothing else happens.

fwiw...I will be spending about $200/mo shorting OIL.

Very good explanation on the first one. I understand now, and I guess most people dont know about the people flipping barrels. I know I didnt, it makes more sense now, I can compare it to the housing market.

On the second one, if the math works, the math works. But if the reason behind it is wrong, that makes the math wrong which would make your predictions wrong. Its like a critical stop, once you see one thing deviate from your "conspiracy theory" that makes everything you just said wrong.

And I still see that as further devaluation of the dollar unecessarily. Will this actually be that reversable in the future?

Edit: In the *near* future.

 

[WhoSayWho? 5,000+ posts]

How is the contest going Flipper?

 

[Chevillac 5,000+ posts]

Not neccessarily. Things can be correlated but without having causation. But you are right...if it significantly deviates, it will be a worthless calculation. However there is *some* logic behind it.
The dollar's devaluation can be reversed only by the market. Governments can't *fix* devaluation without hurting the economy. The easiest way to fix devaluation is to raise interest rates (so people start buying dollar). That is problematic when people are getting kicked out of their homes due to ARMs. So which problem do you fix? Devaluation of our currency or domestic credit problems caused by over zealous spending?

//content.invisioncic.com/y282845/emoticons/word.gif.64b12e39f936af3b4fff38a1c0bd0244.gif to the first respone.

The second one, well For some reason I read your other response as the government intentionally letting the devaluation of the dollar continue. Not sure why. And, Ill give you my answer, and you tell me the effect it would have, but my answer probly wont change. I would say fix the devaluation of our currency. Tell me the effect and outcome of each. Like if we fixed devaluation, what would happen with the domestic credit problem, and would the fix actually work. ANd vice versa.

This is a educational.

 

[Chevillac 5,000+ posts]

She lol'd about your ceiling tile comment.
Corey had me thinking this would be a very destructive meanuver (sp?)...but after talking to her last night, perhaps not.

The goal is to tease the other person into submission. We have an expiration date of the 11th....it ensures no hard feelings or abondonment.

she perfers on top btw

Tell her to stop reading this thread.

THis thread is for males only!//content.invisioncic.com/y282845/emoticons/mad.gif.c18f003ab0ef8a0d9c27ca78d77a6392.gif

Wait, you talked? like adults? Interesting concept.

Tease like how? You two are perverts, I think thats what this all comes down to.

 

[Chevillac 5,000+ posts]

I am becoming bored again. I might go over to OT today.

 

[WhoSayWho? 5,000+ posts]

Has it occurred to you that after days of teasing the end result is that you are going to blow one massive wad in about 2 seconds and she is going to go be left making friends with the washing macine (or anything else that vibrates)?

 

[luvinthebass 5,000+ posts]

i feel like i'm back in economics class today

 

[Chevillac 5,000+ posts]

Has it occurred to you that after days of teasing the end result is that you are going to blow one massive wad in about 2 seconds and she is going to go be left making friends with the washing macine (or anything else that vibrates)?

//content.invisioncic.com/y282845/emoticons/laugh.gif.48439b2acf2cfca21620f01e7f77d1e4.gif

Blowing massive load in 2 seconds = twins FTL!!!!!!!

I don't really understand your question, but here goes:

If our currency devaluates, it means it is cheaper to buy American goods abroad. So...when Europeans buy a shirt, they may buy American vs. European because it is cheaper. This helps US Manufacturing (to a certain degree) and Services because they are able to acquire them cheaper here. It helps our economy some.

This is bad because it makes other countries mad at us. When they buy American, it hurts their manufacturers....because it make importing stuff into America more expensive. It also raises the price of products pegged to the dollar....like oil. When oil is $95 a barrel, we give them $95, but if they go to england to buy a rolls royce the dollar doesn't go very far anymore because it is priced in pound. Last year (just an example) a British pound was worth .50. Today it is worth .25. So you need twice as much dollar to buy the same shit....so the Arabs raise the price so they can buy the same *amount* of shit as before.

When you fix devaluation, you have to raise interest rates. This gets investors in other countries to simultaneously sell they currency and buy ours. That makes their currency depreciate and ours appreciate...thus reversing everythin said above.

 

However, when you do this it makes borrowing more expensive and hurts the economy. ARMs shoot up and so does corporate borrowing. Which is kind of bad as well.

I am glossing over. It takes a couple years of classes to understand how exactly this all fits together.

Managing a global economy is a lot like running game on a woman...to weak and she doesn't know you exist, too strong and she yells ****.

THanks. It does make sense. Learn something new everyday. You did answer my question (the bolded part). So yeah, I still say fix devaluation. How is fixing the debt problem from overzealous spending more beneficial to our country, than fixing the devaluation of the dollar in the long run.

Does it have anything to do with recession and depression?

 

[Chevillac 5,000+ posts]

i feel like i'm back in economics class today

its awesome isnt it?

 

[luvinthebass 5,000+ posts]

i learn somethin new everytime i visit and post in the crunk thread it seems //content.invisioncic.com/y282845/emoticons/smile.gif.1ebc41e1811405b213edfc4622c41e27.gif

 

[luvinthebass 5,000+ posts]

better then watchin the news that's for sure

 

[Chevillac 5,000+ posts]

Yes, but more importantly
It matters because people vote. They have no idea about currency evaluation or the effects. They know when they get a letter in the mail saying they mortgage increased. They get mad and call they congressman saying it is unfair and we need to do something. The president gets flak for not appointing the right chairman, makes his party look bad.

If people weren't stupid or we can remove politics from finance, we'd be much better off.

SO basically, the government/president/whoever is forced to fix stupid peoples' problems opposed to fixing the problems of the nation? I see. I guess its a problem of the nation in a way too. But people can also try to fix this problem thereself instead.

Oh well.

Thanks for the lesson flip.

 

[luvinthebass 5,000+ posts]

Flip gets an A+ for today

hope your girlfriend doesn't read that

 

[Chevillac 5,000+ posts]

That is the kindest thing you have ever said to me.
I love teaching people about this stuff. It is about the only thing I am really passionate about.

//content.invisioncic.com/y282845/emoticons/laugh.gif.48439b2acf2cfca21620f01e7f77d1e4.gif

And //content.invisioncic.com/y282845/emoticons/word.gif.64b12e39f936af3b4fff38a1c0bd0244.gif about being passionate about something. Im not sure what my passion is yet, except making money. Who knows, after a few more lessons from you I might be able to make even more money. Mayb eI should take an econ class this semester, since business math isnt available.

better then watchin the news that's for sure

:chuckle: