Posted on 05/02/2012 6:57:42 AM PDT by SeekAndFind
Oil speculators are benefactors of humanity. We should be very grateful to all of them. Next time you see an oil speculator, thank him for what he is doing. Most Americans would strongly disagree with me. But they are wrong -- not morally wrong, but factually wrong.
One of the consequences of the recent increase in the price of gasoline has been the demonization of oil speculators. Politicians, journalists, talking heads, bloggers, and agitators have been denouncing speculators and proclaiming that the general public has been harmed by their speculating. Most of the anti-speculator rhetoric has been civil. But some of it can be described only as hate speech: Google "speculator, bloodsucker" and you will be directed to 295,000 websites. And this anti-speculator hysteria has not been confined to the usual suspects on the left. For example, the normally sensible Bill O'Reilly has been bloviating about the wicked oil speculators.
We now face an even more dangerous idea than the idea that speculation is harming the average American: the idea that the government should do something about it. Many people, including the president of the United States, have called for the government to stop -- or reduce the amount of -- speculation in oil. Vermont's socialist senator, Bernie Sanders, has announced that he plans to introduce a bill to do just that.
According to President Obama, "[w]e can't afford a situation where some speculators reap millions while millions of American families get the short end of the stick." The president's assertion that some speculators have reaped millions is almost certainly true. But his implication that the American people have been harmed by that is false. Those who believe that speculation makes non-speculators like us worse off are factually incorrect.
(Excerpt) Read more at americanthinker.com ...
Of course they are!
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." -- Adam Smith
Nice that you agree.
From my post: ... which is fine.
And your quote confirms what I wrote immediately after that too!
It's not a "dishonest" thing to say at all. So it can hardly be claimed to be "extremely dishonest." Speculators absolutely provide a valuable public service.....that is, unless you think higher prices are better than lower prices.
Oh please. Speculators are only interested in making money, which is fine. However, making them sound like some noble business person providing a valuable public service is extremely dishonest.
Removing context is also extremely dishonest. And I stand by my statement.
It's not a "dishonest" thing to say at all. So it can hardly be claimed to be "extremely dishonest." Speculators absolutely provide a valuable public service....that is, unless you think higher prices are better than lower prices.
Speculation does not equate to ONLY lower prices and speculators DO NOT CARE which way prices change, as long as the price changes favourably in respect to thier bets! Therefore thier motives are not noble and not in the public interest (and do not need to be!).
I didn't take your comments out of context. That's absurd and you are free to stand by your absurdity. You said what you said and your meaning is crystal clear. You are wrong. Deal with it.
Speculators make money if the price goes up or down, that is true. However, regardless of which way the market moves, higher spreads will lead to higher prices for consumers and lower spreads will lead to lower prices. Speculators are good for the market and for consumers because they lower the spreads, and that is contrary to your earlier statement that claimed that it is dishonest to say so.
Speculators absolutely act in the public interest even if that is not their goal. Anyone who understands how markets function, or how they are supposed to function, wouldn't have made the statement you did.
The market would function without speculators and the price the consumer paid would be the price the producer charged, plus any costs involved in the actual movement and storage of the goods between the point of production and the point of sale (and a margin of course).
Speculators add a level of abstraction that only hurts the consumer as they too want a profit. IOW, prices would ALWAYS be lower without the speculator involved.
Of course, speculators take some risk from the producer which tends level out major swings in prices - IOW the speculator earns his money.
Without the speculator, prices for most commodities would vary greatly due to seasonal demands - but the consumer would pay less, and the producer would earn more, “in the end”. There would also be no “spread” since that only exists in the speculative market.
Finally, in todays market - with HFT and all the rest of the dishonest practices which serve ONLY to drive the price - liquidity is an illusion and your “spreads” are meaningless. Trades are introduced with NO intent of having them actually acted upon - simply to drive a price - and the only beneficiary is the speculator.
The only absurdity here, is attesting noble traits to the speculator - as if we should celebrate his accomplishments and goodness. That is normally reserved for persons that act in the public interest first, and then for themselves; not for those whose only value to society is a by-product of thier own self interest.
Speculators want a profit. They also want a foot rub. They aren't guaranteed either.
Without the speculator, prices for most commodities would vary greatly due to seasonal demands - but the consumer would pay less, and the producer would earn more, “in the end”.
Without a way to lock in future prices, commodity consumers would pay more.
Yes, isn't it.
I was merely reinforcing your point. Don't take offense so easily.
On the other hand, I think the author was sticking his tongue in his cheek by implying that speculators are heroes. They're not, of course, but they are a valuable yet oft-disparaged part of a well-developed capitalist economy.
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