Brexit and superprofit

Energy companies have put up their prices because of Brexit! Not their fault of course -- they are simply responding to the 10% loss of value of the pound against dollars and euros. They have to trade in these currencies so they get fewer euros and dollars if they are paid in pounds. Since the price of energy wholesale is half the price of the retail price (so what makes up the other half?),that means prices must rise, by the 'laws of the market', by 5%.

Prices have already risen.So when and if the pound regains its value against the other currencies, prices will fall?  Apparently, the pound did rise yesterday after news of Theresa May's coronation. Since the pound is quite volatile, will energy prices be volatile?

Of course not. Fluctuations like this offer a chance for big companies to gain superprofits by gambling, in effect. You buy lots of raw energy, or even the option to buy it at the lowest prices you can get, gambling that the price will rise again in local currencies when you get the chance to sell it. People have to buy energy, so the companies are in a very favourable position to dictate the price -- even the Tory Government has admitted it is hardly a free market.. They can also hold enough stock to allow them to gamble, while ordinary consumers cannot.

If you own a lot of cheap raw energy you can maintain local prices in the name of the stability needed to make calculable investments, attract new suppliers and all the usual stuff, and if local currencies devalue, you can add a bonus.This cannot be justified in the usual terms of fair returns for risk and so on (incidentally, the main theme now playing is that business does not like risk -- so why should 'enterprise' be heavily rewarded at all?). Instead currency markets can be blamed (usually, markets like this are celebrated) , and the idiots who depressed them by voting Brexit. Serves us right!

The category 'profit' has always been a deliberately mysterious one, including all sorts of revenues. Marx's question still remains --where does it come from if the market equalises supply and demand? The same ambiguity and dodgy generalisations affect 'markets' and 'risk'. As a result, it is easy to divide 'profits', 'markets' and 'risks' into good and bad variants according to whether their movements support or oppose ideological views.