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Regulate speculators to prevent them from doing what? Why is the presumption that the speculators are wrong? Obviously they haven't been so far or they wouldn't keep bidding up the price of futures contracts. And how do you propose Congress regulate global commodities trading? How are they going to stop speculators in the London, Tokyo, Hong Kong, Dubai, etc. markets? And guess who some of the biggest speculators are out there? Consumers who actually need to lock in future prices so they can plan accordingly, such as airlines, railroads refiners. These parties have nothing to gain by bidding the price upward without a rational basis for their bid.
It worked fine when Clinton was in office and we had $1 gas. These huge $5-$10 daily runups lately have been happening on the American market, not the Asian ones. $10 increase because the ECB says they haven't ruled out cutting rates? You mean to tell me that statement alone changed supply and demand enough to justify a $10 increase in the price of oil?
Wouldn't it be wonderful if the speculators took it in the shorts and gas prices started tumbling!
This is the problem with the mentality that speculators are the problem and the reason that financial education should be mandatory for high school education.
Every futures trade has two sides to it, a buyer and seller. Every time the price goes up or down someone wins and the person on the other side of the contract loses. It's a zero sum market. For every "speculator" bidding up the price of oil there is someone, probably a speculator, taking the opposite bet that oil will go down. All those speculators betting oil would go down have been taking it in the shorts for months now and those betting it would go up have done well. That's how a commodity market works.
Every time the price goes up or down someone wins and the person on the other side of the contract loses.
Exactly......the guys from Goldman Sachs churning the trading floor win, and the peons at the pump lose.
Economists like to say how complicated it is, and explain that even though people are lining their pockets with money, it isn't costing you anything. Its the same faulty logic that real estate buyers agents use to justify a 3% commission on a home.
Exactly......the guys from Goldman Sachs churning the trading floor win, and the peons at the pump lose.
Economists like to say how complicated it is, and explain that even though people are lining their pockets with money, it isn't costing you anything. Its the same faulty logic that real estate buyers agents use to justify a 3% commission on a home.
Came back home in Baja from the VA hospital in La Jolla. AM-PM Pemex gas station at the south end of Rosarito had a whole slew of big trucks lined up at the pumps, some with barrows in back, also a lot of cars lined up (very unusual). Something is cooking, wonder what? Maybe a BAD sign here in Mexico. Stefhen
do u think gas prices will ever come back down? to maybe 2 or 3 dollars
i cant believe how fast prices rose in such a short period of time, last year it was only $3 and now its way above 4$ and nearing $5 in just 4 months!!!!!! the new president needs to come up with a way to lower the prices.
no it will never go down unless we actually start selling more things than we buy(exporting) and mr bernanke reins in all those excess dollars he and mr greenspan printed.
the chinese have seen the value of their massive dollar reserves go down with every passing day so they are trying to pass all this paper on in exchange for something of intrinsic value. regardless of what the price of oil is, these guys will buy every spare drop and store it instead of storing reproduced artwork from the federal mint
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Doesn't Look Good
the new president needs to come up with a way to lower the prices.
