Originally posted by normbenign Speculators do what the name implies, they speculate. They basically bet on the future price of commodities. Their bets are on the market, and the reaction to market forces. Actually, if anything their bets, their wins and losses tend to flatten out the actual peaks and valleys of the market. Saying or implying the futures traders control or force the ...[text shortened]... along without even thinking about how they could be involved in forcing gasoline prices higher.
I think you are missing the point that the level of speculation is having an effect on the outcome of the bet i.e if enough hedge funds and other big players speculate/ buy oil futures the the price goes up; and as a result (Speculators 1 - Oil consumers 0).
Originally posted by kevcvs57 I think you are missing the point that the level of speculation is having an effect on the outcome of the bet i.e if enough hedge funds and other big players speculate/ buy oil futures the the price goes up; and as a result (Speculators 1 - Oil consumers 0).
If lots of people want to buy something that has limited supply it will go up in price. Just because you dislike some of the these people (and call some of these purchasers speculators) really does not change the fact that this happens in every market. Do you complain when these "speculators" drive the price down?
Our whole economy is based on speculation. Some people buy houses others buy metals, stocks, or bonds. They hope that the price will change and they will make money. I am not sure why people think oil prices should be insulated from the laws of supply and demand when nothing else in our economy is.
Originally posted by quackquack If lots of people want to buy something that has limited supply it will go up in price. Just because you dislike some of the these people (and call some of these purchasers speculators) really does not change the fact that this happens in every market. Do you complain when these "speculators" drive the price down?
Our whole economy is based on s ...[text shortened]... es should be insulated from the laws of supply and demand when nothing else in our economy is.
The problem is that capital is too concentrated. One of the assumptions of the free market is that capital is widely distributed but that's not the case. It's highly concentrated and it's concentrated within a few small groups. Nobody can capitalize on their frequent mistakes because nobody else has any money.
Originally posted by quackquack If lots of people want to buy something that has limited supply it will go up in price. Just because you dislike some of the these people (and call some of these purchasers speculators) really does not change the fact that this happens in every market. Do you complain when these "speculators" drive the price down?
Our whole economy is based on s ...[text shortened]... es should be insulated from the laws of supply and demand when nothing else in our economy is.
I do not dislike them If I could afford to speculate on the future price of oil then I would. What I dislike is republicans trying to mess with reality and blame everybody else but speculators.
You are aware that it is over speculation that creates the bubble that eventually bursts and causes the economic cycle to enter it's down phase? Again I do not mind, I have nothing against the people who do it, but will remind them it is their doing it, and not food stamps that are the macro economic problem that global capitalism is suffering from.
Plus, I think if you were honest with yourself it is you who has a tendency to dislike people other than those with whom you identify with socially and politically.
Originally posted by sh76 Reagan managed to go over Tip O'Neil's head and got Dems to support his agenda.
There's no inherent reason the Obama administration could not have peeled off an Olympia Snowe or Susan Collins or Scott Brown. Is the political climate different? Perhaps, but there's no guarantee that another administration could not in the future cajole members of the other party to work with them.
Yup. Just be right, and the partisanship will disappear.
Originally posted by Metal Brain I think what is being implied is that speculators are crossing the line into manipulation and are not merely speculators anymore.
Originally posted by kevcvs57 I think you are missing the point that the level of speculation is having an effect on the outcome of the bet i.e if enough hedge funds and other big players speculate/ buy oil futures the the price goes up; and as a result (Speculators 1 - Oil consumers 0).
What you are missing is that hedge funds, and billionaires don't like to lose their money, and watch market trends to make the betting less risky. They don't control it. They don't always win.
Originally posted by quackquack If lots of people want to buy something that has limited supply it will go up in price. Just because you dislike some of the these people (and call some of these purchasers speculators) really does not change the fact that this happens in every market. Do you complain when these "speculators" drive the price down?
Our whole economy is based on s ...[text shortened]... es should be insulated from the laws of supply and demand when nothing else in our economy is.
The good effect of speculation that prices will rise, is that it stimulates more production, or should and would if the market were left alone.
Originally posted by normbenign What you are missing is that hedge funds, and billionaires don't like to lose their money, and watch market trends to make the betting less risky. They don't control it. They don't always win.
When prices fall, speculators also often win.
I do not understand, you are obviously a pro free market person, nothing wrong with that, but apparently you do not understand the mechanism of supply and demand. It is the basic mechanism that governs the free market, it is what Adam Smith was referring to when he introduced the 'invisible hand' concept.
If enough people/investors demand oil then the price of oil will rise in accordance with that demand.( by demand I mean 'real demand' i.e demand backed by the ability to pay).
What speculators are doing is distorting the physical demand for oil, i.e the oil that the global economy can actually burn. I am not claiming any big conspiracy, hey maybe it is just investors being savvy with their money; but it does raise the price of oil over and above our physical demand for it.
Originally posted by normbenign How does that manipulation work? Just the basics. Nobody ever explains how, just that they mysteriously do it.
I have noticed that too. That is why I think it is the dollar losing value that is the true cause of higher oil prices. I think Obama is using speculators as scapegoats so he can allow the true cause to go without blame.
Originally posted by Metal Brain Why the holdup on the Keystone Pipeline?
Something to do with land rights and environmental concerns I would Imagine. what reason have you got? and how is it affecting the price of petrol in the U.K?
Originally posted by Metal Brain I have noticed that too. That is why I think it is the dollar losing value that is the true cause of higher oil prices. I think Obama is using speculators as scapegoats so he can allow the true cause to go without blame.
Obama is a corrupt puppet.
If it was just inflation of the dollar that is causing the oil price (measured in dollars) to rise, wouldn't you expect everything else to become equally more expensive as well?
Originally posted by KazetNagorra If it was just inflation of the dollar that is causing the oil price (measured in dollars) to rise, wouldn't you expect everything else to become equally more expensive as well?
Oil speculation
20 Apr '12 19:13
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