When you look at where the overwhelming majority of lithium batteries are produced, it makes sense to use China as the benchmark (and why it pays more than the US or Europe).
This kind of predatory leeching has to stop, once and for all.
[1] https://www.statista.com/statistics/377025/global-futures-an...
Another related study.[2] Studies agree that the tail is wagging the dog, but there is no agreement on what to do about it.
[1] https://www.nber.org/reporter/2014number2/financialization-c...
[2] https://americanaffairsjournal.org/2019/11/commodity-financi...
Thanks. JFC, that one was mind blowing:
> Last year, production increased to 30.2 billion barrels, but these futures markets alone swelled to 541.6 billion barrels, becoming eighteen times bigger than the global physical output.
So, to put it clear: on average, before reaching a refinery, each barrel of oil that ends up there changed hands eighteen times, with each step extracting wealth (in the form of buy/sell price spread) along the way - for zero gain for both the producers and the consumers of the oil. And yet, everyone seems happy with it.
> but there is no agreement on what to do about it.
If you ask me personally, the answer is easy: burn the entire thing down and restrict the rebuilt one to actually legitimate market participants (producers, wholesalers and consumers of commodities). The current system serves no real purpose other than to enrich a very few people at the expense of everyone else, which is also the reason why this won't ever happen - the financial incentives and thus the amount of money flowing into corruption and its legal friend lobbying is just too much.
The problem is, you won't get that kind of clear-cut answer from any academic studies or even most political parties outside of the far-left (like me) who criticize it on the very real effort this looting has on poor people and the far-right who tends to focus more on the conspiratorial part. It's in the end a question of political ideology and of how independent science, journalism and politics can actually be when faced with billions if not trillions of dollars of financial interests.
There's history here going back to at least 1870 or so.
The farmer position: [2]
The American Enterprise Institute position: [3]
An intermediate position: [4]
[1] https://www.wisfarmer.com/story/news/2021/01/04/snapshot-top...
[2] https://www.wisfarmer.com/story/news/2023/11/13/farmers-are-...
[3] https://www.aei.org/research-products/report/stop-paying-att...
[4] https://www.politifact.com/factchecks/2019/apr/04/elizabeth-...
Yeah, but that's what solid antitrust policies, audits and enforcement are for - at least in theory. Someone has to play police after all, to make sure that everyone can reasonably participate in any truly free market. The problem is that most anti-trust legislation is more aimed at large, nation-scale corporations and even there, enforcement is lacking, but small, regional monopolies/monopsonies or other threats to a free marked are a complete Darwinist world.
In smaller markets stock trading can turn into a manipulation game completely unrelated to the underlying asset.
> Authority stated that it was the perishable nature of onions which made them vulnerable to price swings.
I'm just an interested bystander in terms of futures trading and the article relates to some studies which seem to find that even in the very decade of that incident, onion price volatility was decreased. So is there any strong evidence supporting that any small futures market can be gamed?
Most commodity futures are not legitimate trade; i.e. most parties that will never actually possess the commodity.
They're speculation.
> That's anti-freedom.
No, that idea is not anti-freedom.
People have, from time to time, experimented with banning speculation in commodities like onions in the US. And the wholesale prices of onions are much more volatile than other vegetables as a result. Sometimes commodity traders cause wild price swings and usually lose tons of money with stupid speculation, but more often they act to smooth things out.
Simultaneously you have demand and supply pressures especially if demand is increasing and supply cannot keep up, pressures due to limited transportation and shipping capacity which was a huge issue over the past couple of years across the board (and probably a bigger driver of inflation than nearly anything other than energy prices), and other costs increasing such as energy prices.