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To: ZULU
Speculating puts liquidity into markets; and it has for thousands of years.
Without liquidity, end users and producers would not be able use essential tools to protect their positions.
Southwest Airlines was famous for hedging their fuel supply before the 2008 price spike.

The speculators that you don't like; were on the other side of those trades and lost their rear ends.
Their money on the other side, allowed SouthWest to execute it's fuel hedging strategy.

Same with a farmer planting a corn crop right now. Or Ford Motor locking up input prices.
Or a mortgage lender offering mortgages to customers today; but that won't close for 3 months.

Illiquid markers make these things hard to do.

71 posted on 04/22/2010 10:10:19 AM PDT by HereInTheHeartland (Chairman Mao was a community organizer)
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To: HereInTheHeartland

I understand what you are saying. But won’t their actions drive energy costs so high that at the current time, it will further wreck the economy?

The real solution is to incresae supplies by allowing drilling off shore and on the Alaskan Slope and allowing oil shale production, as well as increasing nuclear energy plants, natural gas usage and start using coal again.

But the leftists who run the government are unlikely to do this regardless of the need. Even Bush waited too long to lift his father’s moratorium on North Slope drilling.

When gas prices were going up during Bush’s last term the media gave us day-by-day accounts of the increases. Today they seem to be ignoring it.


74 posted on 04/22/2010 11:07:02 AM PDT by ZULU
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