Beam me to Planet Gore !
Posted on 07/10/2008 12:39:46 AM PDT by grey_whiskers
Bump for later.
“I hear a lot of comments from average joes likening the financial markets to a rigged gambling hall. And I can’t say that I disagree.”
Regretfully, count me in on being an “Average Joe”
The problem with this is that uncontrolled, it could lead to hyperinflation and higher interest rates as a balancing consequence. Unfortunately with the current credit and mortgage crises, it’s just not something that is on the table...
It’s going to take a deft hand. This fire sale is bumming me out right now, though. I just hope that by the time this bubble ends, there will be enough America left owned by Americans to bother investing in.
In many cases, government regulation causes more harm than good. However, during/after the Robber Barron days, and during/after the previous Great Depression, there were some regulations put into effect that diminished particular types of destructive behaviors from the markets. For many years after WWII, we had prosperity and constructive growth in our markets. Sanity in the marketplace is not "class envy". I am all for the long-term survival of our nation and economy.
Just received this yesterday. The emphasis added is mine:
AN OPEN LETTER TO ALL AIRLINE CUSTOMERS From 12 Airline CEOs.
Hello {Mr. Airline Customer}, Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help now.
For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers.
Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.
Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.
Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper.
The nation needs to pull together to reform the oil markets and solve this growing problem.
We need your help. Get more information and contact Congress by visiting www.StopOilSpeculationNow.com.
There's an old saying, that you can either run a company or run to Washington. The airlines have a long tradition of encouraging the government to restrict the behavior of others to their benefit.
Speculators (I mean pure speculators... not airlines ... which are also speculators) do not have an effect on the level of oil prices. They increase the volatility of oil prices, but not the level. I can't say it any more plainly than that.
You do not want Barney Frank and Chuck Schumer deciding who gets to buy oil and who doesn't. That's exactly what the Airlines want, and if you listen to this BS that's exactly what you'll get.
I know I’ll catch flak for this, but...
I actually don’t want the oil bubble to burst. I’d like to see prices drop, some, steadily, to around $100/barrel, and stabilize there. Am I nuts? Well, I don’t think so. If the price stabilizes, the economy will adjust. It’s the instability and resulting inability to make rational business decisions that’s bad.
I see $100/barrel oil as an OPPORTUNITY, not a curse. It’s an opportunity because it provides and incentive to build nuclear power for electrical generation. It makes oil shale extraction and synthetic petroleum from coal commercially feasible. Accomplish those things, and the mullahs can rake in the money from the Chinese and Indians. I don’t care. We’re taken care of and not bleeding money to them any more.
Most experienced oil men say oil should be around 50 to 70 a barrel.
Drill now.
This is what Japan did to stem its deflationary decline for the past 20 years, but at least they had savings to do it with.
No, Japan did not print more and more money. If they had, they would have ended their deflationary spiral. Instead, they spent trillions on government construction projects. They didn't stop the deflation and now their government debt is around 160% of GDP.
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