Speculators? Bull.
Same problem in the 19th Century. NEngland/NY bankers and British and Southern cotton factors were blamed for 'exploiting' cotton planters. Gross value of the cotton crop was discounted 30-40% because of market inefficiency. Still, the factors and bankers were needed to conduct the international trade of cotton. With fewer 'middlemen,' the market inefficiency would have been even greater.
Second, the cry of 'speculators' only arises when prices are rising and someone thinks they have been 'ripped-off,' even though such a term has no academic content. There are no complaints when crop production is huge, market prices fall, but farmers receive MORE than the market price because they 'locked-in' gains from contracts with 'speculators.'
Purely one-sided economic illiteracy to blame 'speculators.' Critics never consider a market where prices are falling. With respect to oil today, prices are unlikely to fall because of the inability to shift the SUPPLY curve to the right. NO NEW massive supply response can take place in response to higher prices. That is the implication of Peak Oil. Additionally, all the idiots NEVER MENTION the shape of the demand curve. It is much closer to vertical that most assume. Thus, the WHOLE SET of prices and quantities demanded (demand curve definition) is INELASTIC. This means a huge change in price, up or down, will not affect the quantity demanded. This is simple econ.
BLITHERING idiots in Congress, Dave Obey, Claire McCaskell, etc. have NO clue. They are simply ignorant ...but some college said they graduated with xyz degree.
When the captain is drilling holes in the hull to let the water out of the bilge, ya know we got a problem in more than Houston. |
