--whoever this ignoramus is, he needs an Econ 101 course---
Perfect. I’m selling Oil Stocks at the close today, and moving to Emerging Markets.
Buy Low, Sell High!
it would be nice to know how much of the futures were purchased with petrodollars to assist in the upward pressure on price.
It would also be interesting to see how many of these dollars find the path into the Obama war chest for 2012. Credit card companies should start hiring now to process all of those $50 web site contributions;)
Not that long ago (could be a decade or more) commodity and energy volatility was kept low because speculators couldn’t bet on commodities unless they could take delivery. There was a long time rule in the CFTC that they had to be a user or require a hedge in order to to buy a contract. Goldman Sachs was the first to receive a secret exemption to that restriction and the rest is history.
“Speculators” are NOT some evil boogeyman!
“They” are you and me, either directly or via mutual fund investments, buying scarce resources in anticipation of higher demand in the future.
Do these authors really pretend that “responsible investing” is limited to throwing money away in bankrupt bond issues?
This will never happen because we have an Anti-American, Uber-Marxist in the White House... BUT (here is my “perfect storm”):
Tomorrow morning, announce that the US will move forward with full access and utilization of our domestic resources - from the Bakkan reserves, to full support for lignite use, the Gulf of Mexico is now open for business - exploration, drilling, and production, and ANWAR is now open.
Over night, the price of oil (and the criminal speculators’ portfolios) come crashing down.
Would be such poetic justice for those who continue to artificially inflate the price of oil.
Gee, increase demand and resrict supply. Why would betting on higher prices be wrong?
Did this writer take ECON 101 in school? Or read “Basic Economics”?
Commodities markets exist for the purpose of allowing hedgers to lay off risk onto speculators. In much the same way that Stock and Bond markets exist to bring together capital looking to make a profit and companies that need access to said capital.
Speculators, properly viewed, are not the problem, they are part of the solution.
Are they putting gas in all those Buicks in China? Oh my! What happens to the price of oil if China tanks because the price of oil is too high? I’ll draw the Xs on the sidewalk for the speculaters to aim for when they start jumping.
It certainly looks like the media is ONCE AGAIN causing conservatives to attack the wrong boogy man - this time BIG SPECULATOR.
Sure, you can get short-term run-ups by people speculating long, but supply and demand will ALWAYS win out in the end, and those run-ups will come down just as fast...as did happen in 2008.
In the end, the ONLY thing that matters is SUPPLY AND DEMAND and if there is enough supply, prices simply CANNOT stay high, no matter what BIG SPECULATOR, BIG OIL, or BIG GOVERNMENT wants (unless they tax it more). That simple.