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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: tonto who wrote (767432)	5/30/2008 1:12:12 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 769670

You'll remember that what I said was: "Speculators' have little or nothing to do in the long-run with the market-clearing price." Short-term swings are just that - short term swings, subject to a lot of variables, up or down, weather, speculation, news headlines, etc. But, there is a real EXPENSE involved with mounting a financial or real commodity position... carrying costs, time value, storage expenses if one accepts physical delivery. So, in the longer run market players 'speculating' do not materially 'change' the market-clearing price. Rather, they provide a VALUABLE SERVICE by increasing visibility and depth in the markets... and financing to commodity companies. All these folks out there railing against Capitalism are just deluding themselves... and delaying the day that real and effective action gets taken to affect supply/demand considerations. (For example: the decade-long energy price surge of the nineteen seventies was only tamped down when prices rose enough that actual demand was affected. For example, when the consumers' market behavior changed enough so that their vehicle purchase decisions tilted more toward fuel efficient vehicles, and thus the composition of the vehicle fleets on our roads materially changed over years. Also, conservation efforts [insulating buildings, re-engineering manufacturing processes to use less energy inputs, etc.] began to bear fruit and world demand curves leveled off.) Having Iran fight Iraq for ten years in the 'eighties (& both nations having to pump 'full-out' to pay for the expensive business of war...) also kicked in to that change in the global supply/demand relationship for a while. In the final analysis, it is TRUE what is often said: the only "cure" for high energy prices is high energy prices. But the Capitalist markets mounting positions in commodities is not a problem. It is more of a benefit.