Get a grip on reality! Do you really think our government is going to do anything to help you and I out? No way, too much money is flowing into certain individuals pockets and just look at the tax revenues generated by high fuel prices. Get realistic, but you do get a point for posting.
Since when is "SPECULATION" against the law? When Americans invest in any thing that might bring a good return are they not speculating? This is very basic to our Free Enterprise System. Only in a Socialistic/Communistic government is Speculation kept to a minimum or prohibited altogether. You end up with North Korea, Cuba and Belarus and other similar Governments. I am not ready to go down that road. The solution is to increase supply of oil from domestic sources and allow refineries to be upgraded and new ones built. If we had done this 30 years ago, we would not be in the pickle today.
Since Speculators don't have to have anything but a piece of paper to run prices up. Makes sense and forgive me for having a more positive attitude about this but the politicians (house and senate) KNOW this is something that, if they don't act on getting these fuel prices lower in whatever means is necessary, will get them REPLACED come election day. You and I have the power to do that. The biggest problem is that on election day, no one seems to know the voting history of their own rep and just "assume" that the one that is in there is the best for the next term. BS on that. Be a responsible voter and citizen, and keep checks on your reps. If they don't represent you then do what you need to do to get them out. VOTE FOR THE OTHER GUY! Being a jerk and just being a negative, go with the flow, type person is doing ABSOLUTELY NOTHING to help this country out. Get off your BUTTTS! Now, someone else can have the floor and BTW, thanks to the OP for supplying the link.
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SieraSam wrote: Since when is "SPECULATION" against the law? When Americans invest in any thing that might bring a good return are they not speculating? This is very basic to our Free Enterprise System. Only in a Socialistic/Communistic government is Speculation kept to a minimum or prohibited altogether. You end up with North Korea, Cuba and Belarus and other similar Governments. I am not ready to go down that road. The solution is to increase supply of oil from domestic sources and allow refineries to be upgraded and new ones built. If we had done this 30 years ago, we would not be in the pickle today.
Because this is the same type of speculation that was a major force driving the now bust real estate market. Reliable sources indicate that about half of the new homes built during the height of the real estate boom were never lived in: they were bought to flip with industry insiders leading the way. In the same fashion, a lot of upward price pressure on oil is from folks who never plan to use it. There is a lot of loose & easy money (hedge funds, pension funds, etc) heading into oil futures - just like there was in real estate a few years back
If every single untapped source of oil was exploited in this country, it would add about 1% to the daily global production. Yes, there are lots of sources left, and while they are huge in some cases, the production rates are pretty low compared to a tradional well. Yes, we need go get that oil, but it will NOT be the Silver Bullet it is made out to be.
And yes, we desperately need about two dozen more refineries. Needed them about 20 years ago, when the last one was built.
* This post was
edited 06/23/08 02:44pm by rushin roulette *
Once again the law of unintentional consequences causes fluctuations in the world's economy. Hedge speculation is something that is needed by all commodities. There is nothing illegal, tricky or unscrupulous about it. Unfortunately, someone found out that if enough people do it they can actually drive the price. They learned this lesson back in the dot.com years. They honed it to a point in the real estate market.
The index speculation could be controlled by requiring the speculator to take delivery of the commodity that they buy the contract on, but what would be the consequence of that move?
Government intervention is not the answer my friends. Politicians make laws, not by logic, but by knee jerk reactions to a situation that is upsetting the voter. A group that by and large is not able to fathom all of the reactions that a move like this would make. Thes pols create a law, usually one that has minimum impact on themselves, and then rush on to another "crisis". instead of concentrating on the things that they are supposed to, like the stuff in that pesky Constitution.
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If it's listed in the Yellow Pages, the government shouldn't be messing around with it.
My heart goes out to the dolts in Congress. Here is what the "Expert" said:
Quote: There are two kinds of speculators in the futures markets, Masters said. Traditional speculators are those who need to hedge because they actually take physical possession of the commodities. Index speculators, on the other hand, are merely allocating a portion of their portfolio to commodity futures.
If he's such an expert, he would have stated it this way:
Quote: There are two kinds of participants in the futures markets, Masters said. Traditional participants are those who need to hedge because they actually take physical possession of the commodities. Speculators, on the other hand, are merely allocating a portion of their portfolio to commodity futures and speculating on changes in the price of the commodity.
If he did not even care to distinguish between a "Hedger" and a "Speculator" do we really gain from his "insight"?
We need a coherent national energy policy!
More nuclear plants;
Offshore drilling in the USA on all coasts;
ANWR drilling; and
Investments in alternative energy research by the capital markets (not Washington!)
BTW, the current House and Senate leadership have consistently voted against opening new areas to drilling. Let's thank them for the high prices!
Reality is that which, when you stop believing in it, doesn't go away.
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The index speculation could be controlled by requiring the speculator to take delivery of the commodity that they buy the contract on, but what would be the consequence of that move?
The companies that are truly hedging rarely take actual delivery. The difference is that they could, if necessary.
The interesting issue to me personally, is why the marketplace has moved in the manner it has, who will lose the most when it turns?
We've seen more than our share of investment bubbles in the past several years, and this is like waiting for the other "shoe to drop".......
The "Tulip Buyers" in years gone didn't know it was a bubble either....
SieraSam wrote: .... The solution is to increase supply of oil from domestic sources and allow refineries to be upgraded and new ones built. If we had done this 30 years ago, we would not be in the pickle today.
Look at the video in this post. Tell me if you see any oil wells or refineries.
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& Mary 
