The World as We Know It

Amidst the chaos in Cairo and the natural disasters in Australia it gives us all a lot to ponder. Now of course the disasters that hit Australia one after another is nothing less than devastating but it just amazes me how the commodity markets attempt to capitalize on these disasters in a way that doesn’t make any sense.

For instance the price of Sugar has been on the rise since the cyclone hit Australia now reports predicate this on the fact that Australia produces Sugar but then again so does Brazil, which is the largest and India, Thailand, China, Mexico, Colombia, Argentina and the United States, and Australia’s sugar production is only 3% of the worlds total sugar production so why is the market impacted so greatly?

Well the beneficiaries of the rise of course would be the contract holders and other sugar produces globally, now the losers in this deal are the refineries as their costs are increased and us the lonely consumer. A lot of media outlets talk about OPEC and how the world oil markets are manipulated, well if you think for a second that there isn’t a Sugar Cartel then you are fooling yourself.

There is definitely a certain level of corruption in my opinion in the global sugar markets because the production is pretty high and companies such as Dominos and Hershey’s who are large purchasers of sugar do not come close to purchasing the quantity of sugar that would shake the markets.

So where does all this sugar go? Well your guess is as good as mine but I wouldn’t be shocked if there are barges and warehouses filled with sugar just to keep it off the market. The same as with the Diamond industry, people think that diamonds are as valuable as they are marketed to be but in reality diamonds are pretty abundant worldwide and lots of diamonds are taken off the market to increase their value to consumers. It becomes a supply and demand issue without a doubt.

There are actual stones that are rarer than diamonds but due to the marketing of DeBeers throughout the decades the allure of diamonds have captured the imagination of the rich and famous as well as making them desired by those that are not of the elite crowd. Some of the rarest stones that you’ve never heard of due to the lack of marketing include Red Beryl Emerald which can retail for about $10 to $12,000 a carat, Musgravite which can retail for about $30 to $40,000 a carat and Blue Garnet which can retail for about $1.4 to $1.6mm a carat. So the price of diamonds has zero to due with its abundance but more with the marketing behind it.

Way back when stones such as Rubies, Amethyst, and Garnet were in the spotlight, during the Victorian era stones such as Turquoise, Pink Coral and Pearls were in vogue thus more expensive and during the Mourning Period of the Victorian Era stones such as dark Onyx and deep red Garnets took center stage. The same holds true for the various fashion eras such are Art Noveau, Edwardian, Art Deco and Retro, the marketing of the stones increased the value but the reality is that some of these stones are more abundant than others but we as consumers become sheep after a while and believe the propaganda that is shown to us.

I know I’m going off the topic kinda but not really, my point is that manipulation of prices of any commodity can be and is done, we’ll never be able to simply unveil it but it is present and impacts our lives daily, being well informed on an individual level is what helps us to understand the “WHY”.

Now jumping back to Cairo, all the chaos that is happening over there is impacting oil prices, the price of gold and other commodities, now what this is in its simplest form is a world event being exploited for profit, and someone is pulling the strings of the puppets that you see on television. Its unfortunate again because it’s the people who pay the price, not corporations or the government, they all profit from chaos and as it was said in “The Dark Knight” by Heath Ledger as he mastered the role of the Joker, “Chaos is Fair” but I don’t think I agree with that too much, I would say that chaos sometimes exploits some truth but not the real underlying factors.

In our comic book and film series “WEAPONS of Virtue” we will be hitting certain topics that will definitely shed some light on some things and will make you think a little deeper about what is around you and how you as an individual are impacted and more importantly how your family for generations will be impacted.

And that’s it for this installment keep tuned as my posts get into other areas that will make you think about life, love, finance and even your dog, yeah I’m across the board people and these are my rants.

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