You are repeating the talking points of the Democrats/Marxists.
Democrats being Marxists naturally blame the speculators ( the free market) and the oil companies (private companies/Capitalism) for the skyrocketing oil prices.
Speculators are not causing oil prices to rise. Neither are U.S. oil companies. OPEC has because because they have purposely held back production.
The reason oil prices are high is because supply has not kept up with demand since 2005.
Futhermore speculation is happening in many markets around the world, London, Dubai, Asia etc. So you and Democrats/Marxists are saying all these speculators in different countries with different laws are all conspiring to set the same price. That is a ridiculous assumption. This fact shows that is the price that supply and demand allow.
Democrats think further government regulation of the free market will improve things. I have seen hundreds of examples where government regulation and interference has made things much worse (oil drilling, health care,Colleges, public schools, USSR, Eastern Europe etc.)
If you are right and this is speculative bubble then prices will fall like they did in the housing sector. But you are wrong. I’ll see you here in 3 months when the “bubble” will not pop but oil prices will be $200 and then next year when they’ll be higher than that.
Hayek shows just one reason why government planning can never work: http://www.mackinac.org/article.aspx?ID=9529
Ding ding ding rignt out of the box.
Well, you are a clueless twit, ignorantly spewing Goldman Sachs propaganda. Futures markets have always had position limits for speculators, and for good and valid reasons. The particular legislation under consideration would only classify investment banks as speculators rather than as commercial participants in the market(producers or consumers of the physical commodity). Why do you object to this? Either you are on GS payroll or are you really that clueless. Or maybe you still think that after all that has happened in the last 6 months that what is good for GS is good for America.
You can educate yourself about the specific problems in this market by reading Testimony of Michael W. Masters Managing Member / Portfolio Manager Masters Capital Management, LLC before the Committee on Homeland Security and Governmental Affairs United States Senate May 20,2008
As to your ignorance of economics, I don't know how to cure that. You are probably going to lecture me about "free markets" and all that stuff that you are actually also totally clueless about. The classic economics theorem on free markets is the so-called "welfare" theorem (which has nothing to do with THAT kind of welfare). It states that in order to get the benefits that you expect from a free market, three conditions must hold: 1.) no monopolistic (or ogopolistic power). 2.) No information asymmetries and 3.) no externalities.
Not only do not all of these apply to the current oil futures market with a large fraction of total positions held by long side only speculators, but in fact, none of them apply.
Come back and we can argue further when you have a clue what you are talking about.]
But if your only response to this is to call people Marxists then I am going to continue to call you an ignorant and foolish tool of the investment banks.
Furthermore, you are putting words in my mouth without understanding what I said, because you don't understand now speculators make money in markets where there are inelastic supply and demand curves, probably because you don't understand the classical theory of economic rents (see Ricardo).
The question on the table is what to do if anything about long side only index speculators who have none of the position limits that apply to other speculators in futures markets. That is the subject of the current legislation. As far as anyone has argued, this particular class of speculators serves no useful purpose.
Since the do not buy and sell, but merely buy and hold positions of ever increasing size, they do accumulate commodities in fact. Oil producers, instead of producing and selling on the spot market, can sell on the futures market to customers who never want to take delivery. So they leave the oil in the ground.