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View Full Version : This should probably be on the main board.



Uncle Bill
04-24-2012, 01:00 PM
My guess is the majority of those that buy into the 'speculators' are the reason for the high gas prices, don't visit this board very often. But anyway, here's a very good comparison to illustrate how rediculous the Obama followers are ignorant of the workings of the "oil patch".:rolleyes:

UB

What Would Happen If We Banned Oil Speculators?

http://sayanythingblog.com/files/2012/04/bulbonionimage-300x300.jpg http://w.sharethis.com/images/check-big.pnghttp://w.sharethis.com/images/check-big.png

Written by Rob Port.
Speculators are a political punching bag for politicians of both parties. To hear the political folks tell it, our of our problems with high gas prices and the subprime home mortgage market is all the result of speculators manipulating the market for gains. Speculators, according to the talking points, create volatility in the market to the detriment of us all.
But is that true?

It’s instructive to look at how markets perform without speculation, and we actually have a real-world example we can point to. Since 1958, speculation in onions has been illegal thanks to onion growers who felt that speculators were causing too much up-and-down in the markets. How has that worked out?

The wild swings in onion prices make volatility in the oil market look tame by comparison. Here’s a chart from Mark Perry (http://mjperry.blogspot.com/2012/04/what-can-onions-teach-us-about-oil.html):

http://sayanythingblog.com/files/2012/04/onions.jpg
Speculators actually ease market volatility. Speculators buy low and sell high. They stop price crashes by buying up surplus supply. The top price peaks by selling off those supplies when prices recover. Speculators are a positive, even necessary, part of the market. They’re scapegoated by politicians who would rather blame somebody else than their own meddling policies for problems in the marketplace.

Mark Perry points out (http://mjperry.blogspot.com/2012/04/gas-prices-are-falling-can-we-thank.html) that oil and gas prices are currently trending down (despite our entering the summer driving season). Will oil speculators get credit for that? Or will the politicians take credit?

I think we know the answer to that.

Franco
04-24-2012, 01:28 PM
http://w.sharethis.com/images/check-big.pnghttp://w.sharethis.com/images/check-big.png

Written by Rob Port.
Speculators are a political punching bag for politicians of both parties. To hear the political folks tell it, our of our problems with high gas prices and the subprime home mortgage market is all the result of speculators manipulating the market for gains. Speculators, according to the talking points, create volatility in the market to the detriment of us all.
But is that true?

It’s instructive to look at how markets perform without speculation, and we actually have a real-world example we can point to. Since 1958, speculation in onions has been illegal thanks to onion growers who felt that speculators were causing too much up-and-down in the markets. How has that worked out?

The wild swings in onion prices make volatility in the oil market look tame by comparison. Here’s a chart from Mark Perry (http://mjperry.blogspot.com/2012/04/what-can-onions-teach-us-about-oil.html):


Speculators actually ease market volatility. Speculators buy low and sell high. They stop price crashes by buying up surplus supply. The top price peaks by selling off those supplies when prices recover. Speculators are a positive, even necessary, part of the market. They’re scapegoated by politicians who would rather blame somebody else than their own meddling policies for problems in the marketplace.

Mark Perry points out (http://mjperry.blogspot.com/2012/04/gas-prices-are-falling-can-we-thank.html) that oil and gas prices are currently trending down (despite our entering the summer driving season). Will oil speculators get credit for that? Or will the politicians take credit?

I think we know the answer to that.

Speculators also buy high and sell low. The price as we all know, doesn't always just go up. That is the price they pay for securing the energy they need. It is the Free Market at work and a much better system than any type of Government controls or other artificial means of manipulating the system.