Quote:
Originally Posted by Dryce
The prices were not driven by demand - but a over-confident delusion of demand.
That's what the markets do. This means that you can shift the market headline pricing significantly based on a small amount of money or a minor news item.
The Chinese in part set it off because for their own reasons they decided to increase their reserves. So a combination of a small but tanglibe % increase in forward demand combines with sepculators pouring in ended up with a price spike.
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Demand is by definition the ability to obtain a good or service at a price. Now if a group of people collude to offer a fixed amount of product over a period of time then anyone who buys that product will be buying a fixed portion of supply. Therefore you can buy and sell that portion and if more people enter to purchasing equation the price goes up.
I really would have like to tell my fuel supplier that the price was imaginary but that wouldn't have got me anywhere.