Rather than answer myself, I call upon the honorable Thomas Sowell:
Some people think that the reason the public misunderstands so many issues is that these issues are too “complex” for most voters. But is that really so?
With all the commotion in the media and in politics about the high price of gasoline, is there really some terribly complex explanation?
It is clear that many people prefer to blame President Bush. Others prefer to blame the oil companies, who have long been the favorite villains of the left.
Politicians understand that. Numerous times they have summoned the heads of oil companies before Congressional committees to be denounced on nationwide television for “greed,” with the politicians calling for a federal investigation to “get to the bottom of this!”
Now that is emotionally satisfying, which is the whole point. By the time yet another federal investigation is completed— and turns up nothing to substantiate the villainy that is supposed to be the reason for high gasoline prices— most people’s attention will have turned to something else.
Newspapers that carried the original inflammatory charges with banner headlines on page 1 will carry the story of the completed investigation that turned up nothing as a small item deep inside the paper.
This has happened at least a dozen times over the past few decades and it will probably happen again.
What about those “obscene” oil company profits we hear so much about?
An economist might ask, “Obscene compared to what?” Compared to the investments made? Compared to the new investments required to find, extract and process additional oil supplies?
Asking questions like these are among the many reasons why economists have never been very popular. They frustrate people’s desires for emotionally satisfying explanations.
Is there anything complex about the fact that with two countries— India and China— having rapid economic growth, and with combined populations 8 times that of the United States, they are creating an increased demand for the world’s oil supply?
The problem is not that supply and demand is such a complex explanation. The problem is that supply and demand is not an emotionally satisfying explanation. For that, you need melodrama, heroes and villains.
Is raking in real money speculation?
Pick a number. Doesn’t matter. 60%? Sure. $20? Sure. The article is speculation about speculation.
As Ike said on June 5th when confonted with going in poor weather or postponing Overlord for a month, "I don't like it, but there it is."
Force the speculators to cover their paper with real money and speculation will stop.
But then the powers that be will find another way to force us out of our big cars and trucks.
Its a done deal. Adapt.
It a simple issue of supply and demand. When you constrict supply at the same time demand is growing you get a price spike
No evil capitalists out to get you, just simple Economics that could be solved by the USA producing more of it own energy instead of buying on the International Market
If Congress starts to take this kind of thinking seriously again as they did in the 70's then we'll have gas lines again. Back then they set wholesale price caps on gasoline supposedly to prevent excess profits and speculation. The lines appeared overnight. For someone who lived through that it's amazing to see these discredited arguments come back to life again.
Higher prices are natures way of allocating scarce resources to the most efficient consumers. Shortages are natures way of punishing us for price fixing.
This is a really really bad time to have a democrat congress.
lovely
As a result, over the past two years crude oil inventories have been steadily growing, resulting in US crude oil inventories that are now higher than at any time in the previous eight years. The large influx of speculative investment into oil futures has led to a situation where we have both high supplies of crude oil and high crude oil prices.
But the largest holder of oil reserves is the US Government. Bush should sell off some of the SPR at a reduced rate thus causing a glut and making the refineries' reserves worth less (way less) and breaking the back of the speculators.
Selling 4 million barrels/day (to American refineries immediate delivery) for the period of Memorial Day to Labor Day at $60/bbl. There is so much reserve oil that to take advantage of the cheap oil they will have to refine their reserve.
First, although I don't use this product, since people are starting to use bicycles more, people might be interested in this autoshifting bicycle.
Autoshifting bicycleAlso, I'm keeping an eye on developments in bio-fuel production.
First, the bad news about ethanol. Ethanol fires are evidently harder to control than gasoline fires.
Ethanol fires hard to control 1Hopefully, ways will be developed to make controlling ethanol fires easier.
Ethanol fires hard to control 2
On the brighter side concerning ethanol, there's now evidence that people might get as much, or more, bang per buck for their gas dollars with gas / ethanol mixtures.
Gas-competitive gas / ethanol mixturesAlso, I was surprised by the introduction of a machine (popularly known as a still) for making home-made ethanol.
EFuel100In stark contrast to the 1700 gallons of water required to make one gallon of corn-based ethanol as indicated by the OP, the EFuel100 uses only 170 gallons of water to produce 35 gallons of ethanol In other words, the EFuel100 uses less than 1% (about 0.2%) as much water as corn ethanol, under five gallons, to produce one gallon of ethanol.
But also note that the water used in the EFuel100 process does not take into account the water needed to grow the sugar that is used for this process.
And watch out for fines for violating biofuel regulations.
Fines for violating biofuel regulationsAlso, progress is being made in the development of other non-corn ethanol production technologies as well.
Non-corn ethanolFinally, I've also been hearing good things about biodiesel production but need to find some links.
This is not the first I have heard that ICE and OTC oil trading is manipulated. There is an enormous difference between speculation and manipulation. Underlying all contracts is the rule of law, and the rule of law is pretty flimsy with these instruments.
We can rail on government regulation in every walk of life, but one good aspect of regulated markets is that they limit manipulation.
For those that think that Joe Kennedy made his money in bootlegging, that is totally false. He made it in stock market manipulation in the days prior to regulation. Of course, he then we on to be the chairman of the newly-formed SEC.
This article is nonsense.
Great. How much of the recent real estate bubble was “speculation”?
Article = unfounded BS
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The reason is simple: it was his malevolent trading of currencies that destroyed the British pound in 1994 and triggered off the Asian financial crisis of the late 1990's. Because Soros is heavily into hedge-fund trading, it would not take much to figure out that a way to ensure a Democrat becomes President is to malevolently bump up the price of oil through hedge-fund trading, closely supported by other billionaires with Leftist tendencies like Warren Buffett and by quietly providing financial incentives for certain governments in the Middle East and Venezuela.