Quote from DynamicReplic8r:
Could l buy some pot from you?"
1. No, because either I have smoked it or I didn't have any in the first place (i.e. you were assuming), or somebody stole it from me, or the rats ate it (oh, oh they ganged up on me again).
2. You could trade it as an ETF, because I would definitely not sell it to you, unless the sale was hostile (even then you would have to go to war with me).
3. You would have to find an exchange to trade the "pot" ETF, who would have to decide how many ounces per futures contract (depending on my usage, how much the exchange wanted to profit per contract, and, the volume of the ETF to be traded). Not to mention the trading currency of my choosing (include currency manipulation into that).
4. The exchange would then have to have an insurance (include rats, and war) to trade the ETF, and also the liquidiy in the form of a tangible asset (e.g. gold, US T bonds (who's value also fluctuates)).
5. All of the above assumes that my usage of the "pot" would increase (shorts) or decrease (longs), i.e. those taking long positions would want me to use less as they wanted to buy more for themselves.
6. You would then have to cash in the long futures contract, inorder to buy the "pot," at your time of choosing (which may be different to someone else i.e. your consumption is different to someone else).
7. Once you cash the long in, you have to know that I have the "pot" in storage (which also has a tangible cost, insurance).
8. I may invoke "force majour" for any number of reasons (I may not have it, it may have got stolen, my consumption may have increased).
9. I then have to deliver it to a place and time specified on the contract (involves tangible assets including insurance as you want to receive the "pot" in the condition stated on the contract (standard) i.e. not diluted.
10. If the "pot" got stolen, I claim the insurance, the shorts are then stuck, and thus not zero sum, as no long positions to off set.
11. YOU THEN HAVE TO EXCLUDE REFCO FROM THE EQUATION WHO ARE HAPPY TO KICK YOU AROUND LIKE A FOOTBALL, OR BOUNCE YOU AROUND ON THE COURT DURING MARCH MADNESS.
