Posted on 06/20/2008 6:47:55 AM PDT by brownsfan
One of the biggest factors in high oil prices, according to many experts, is that investors, such as hedge funds and investment bankers, can use loopholes in commodities law to manipulate the market and drive crude oil, heating oil, gasoline and diesel fuel prices to new heights.
Congress is aware of the problem and lawmakers recently passed legislation to address the “Enron Loophole,” one of the major loopholes that opens the door to abusive trading practices, but the law didn’t go far enough.
(Excerpt) Read more at stopoilspeculators.com ...
I’m skeptical of anyone denouncing “loopholes”. Further there was no mention of basic supply and demand and my experience is that people and groups who ignore supply and demand don’t often have much of a grasp on reality.
“One of the biggest factors in high oil prices, according to many experts”
Who are these unnamed “experts”?
It’s pure nonsense! It’s supply and demand. The world is not pumping enough oil to meet the demand, so the price rises until the demand goes down! If anyone thinks it’s really easy to make money as a speculator, then try quitting your day job and doing it. As for me, I’m keeping my day job for now.
We need to drill offshore. We need to drill in Alaska. We need coal gasification. We need nuclear power. We need conservation. The only thing that won’t help is attacks on the free market.
Speculators and hedge funds actually help stabilize prices in the market. For every buyer, there is a seller. It’s not like they are buying up the oil and storing it in a giant underground tank.
The degree to which oil speculation drives up the price has been vastly overstated. If supply wasn’t short and demand wasn’t high, it wouldn’t be $140 a barrel period, the end.
I’ll add something else. I work for a company that trades commodities (agricultural in our case) and the sort of backroom, underhanded manipulation that people are talking about can only truly be accomplished in a thin market (one where trading volume is low). Oil is anything but a thin market.
After these floods in the midwest you guys will end up in front of Congress trying to explain your "price gouging". Congress doesn't use a capitalist system. It's why they don't understand capitalism.
We keep hearing ‘speculation is doing this or that’ but where is the explanation of how that is actually happening?
Just repeating the same charge over and over again isn’t proof or explanation.
The article has no substance; it is just claiming that people being able to buy and sell on markets not regulated by Democrats is somehow a "loophole".
By definition, this is a direct attack on the "free" market. Also by definition, anyone who agrees with it is an authoritarian with socialist leanings.
In a truly free market, prices cannot be manipulated this way. The reason it does happen is that the oil market is not a free one due to heavy regulations that act has strong barriers to entry.
Government is not the cure to this problem; they are the cause of it.
Sorry “act as”, not “has”.
Exactly
Require that those that trade in oil- hold 20%.
The people whose ballots will determine your future don't know anything about that. Most of them live in a universe with small resemblance to the real one; it is built up from the vicarious experiences they have had, courtesy of the popular media. Scary, sinister things happen in books, TV, and movies all the time; it's necessary to make them sell. It helps if the things could "really" happen, but this is not necessary nor usual. This makes them a dangerous miseducation, given as it is to "graduates" who have the notion that they are entitled to govern accordingly, whether with a vote or with a bureaucratic pen.
Please explain why not.
“Require that those that trade in oil- hold 20%.”
Why not do that for all commodities? Require that all agricultural speculators either be farmers or own a grain silo, etc.
The markets won’t work as well, but that’s not the real point is it? The real point is that anger and envy need to find some practical means of expression.
Because the thread is about oil.
The use is not a capitalist economic system.
It's a hybrid.
Amaranth's manipulation of the natural gas markets in 2006 indicates otherwise.
Because the thread is about oil.
The US is not a capitalist economic system.
It's a hybrid.
Unfortunately, anger and envy are just as much a part of human nature as greed.
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