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#ActualShippou

Posted 27 November 2012 - 01:27 PM

Farmers don't live in a separate universe from the rest of society and if the free market says one pound of wheat is equal to one hour of software development then both are valid way to contribute to society.


Working an hour of programming will net you with X amount of printed paper, which you use as a trade for 1 LB of wheat.
The problem is, the 1 LB of wheat is not set by the free market, but by a commodity exchange .
I have studied this for quite some time, trying to figure out how it actually works in real life. With out going into a lecture in commodity economics, most of the people who are at the exchanges have no intention of buying or selling any physical goods. They create their own futures notes, which they buy and sell ( perfectly legal ). The way these folks act, is how the market price for the said item is set.
For example if a trader want the prices to go up a bit, they create a bunch buy contracts, than sell them off. The price goes up. Just before the buy contracts are callable, they create sell contracts, which they use to cancel out their buy contracts ( again this is legal ).

So it is not free economy pricing that sets the price of your wheat, it's commodity traders.

#1Shippou

Posted 27 November 2012 - 01:25 PM

Farmers don't live in a separate universe from the rest of society and if the free market says one pound of wheat is equal to one hour of software development then both are valid way to contribute to society.


Working an hour of programming will net you with X amount of printed paper, which you use as a trade for 1 LB of wheat.
The problem is, thee 1 LB of wheat is not set by the free market, but by a commodity exchange .
I have studied this for quite some time, trying to figure out how it actually works in real life. With out going into a lecture in commodity economics, most of the people who are at the exchanges have no intention of buying or selling any physical goods. They create their own futures notes, which they buy and sell ( perfectly legal ). The way these folks act, is how the market price for the said item is set.
For example if a trader want the prices to go up a bit, they create a bunch buy contracts, than sell them off. The price goes up. Just before the buy contracts are callable, they create sell contracts, which they use to cancel out their buy contracts ( again this is legal ).

So it is not free economy pricing that sets the price of your wheat, it's commodity traders.

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