I'm sure that kind of thing goes on, but again, the effects would be temporary. As thousands of market participants around the world react to news and rumors, the true price level will emerge. The moment it is clear that the news is false, traders will be shorting the futures and punishing those who bought erroneously.
The antidote to shady dealing is more transparent and liquid markets, more and better financial instruments, more speculators, and better, cheaper, and more widely disseminated financial information.
As an aside, I think T.Bond traders, sometimes called the bond vigilantes, are a major factor in keeping inflation low. These days, if the US government or the Fed hints at adopting inflationary policies, within moments traders around the world start dumping treasury securities and driving up interest rates, ruining the game for the politicians.
In case you haven't noticed, not only do I not worry about speculators, I am an enthusiatic fan of them. May they all get rich!
The way that consumers pay for gas has also changed. Credit cards fees are huge for retailers....3% off the top.
“I’m sure that kind of thing goes on, but again, the effects would be temporary. As thousands of market participants around the world react to news and rumors, the true price level will emerge. The moment it is clear that the news is false, traders will be shorting the futures and punishing those who bought erroneously.”
How do you punish an oil cartel? If they get away with pushing the price up, they gain alot. If they don’t, then they don’t gain quite as much. They can’t lose.