[Video] Is Oil Price Speculation a Bad thing?

[Paul Or Nothing II]

1) Do you still support specific limits on oil speculation?
2) Do you think Ron Paul does as well? [duh, no]

We know Ron Paul would not support your statist plans to end oil speculation. You put forth a proposition that disagrees with his limited-government platform. So why the fuck do you ask, "does anyone think that if Ron Paul were POTUS he would allow giving big oil co's $4b a year and keep bases all over the world in part to protect oil co's interests?". You accept him as an authority for argumentation only when convenient? Do you not realize he would say - more or less - "Well as President I can bring the troops home - the commander in chief has that authority. The tax policies and subsidies have to be changed in Congress but I would definitely support ending BOTH the subsidies AND the taxes!".

+1

We can clearly see how low IQ, anti-market, pro-government commies exhibit cognitive dissonance & jump randomly from one topic to another!

As for Ron, his position is VERY clear, has been for decades now, he wants less government, less regulation & allow the markets to work themselves out & he believes government's ONLY role is to protect liberty, that is, deal with people violating others' life, liberty or property but then anti-property communists wouldn't know anything about property-rights

Anyways, so he'd let the exchanges & speculators mind their own business & would never try to regulate the prices, margins or interfere in the markets in any way because he believes in PROPERTY-RIGHTS but apparently commies' IQ is too low to recognize such things

Here's Ron talking about the bubble, bailouts & DERIVETIVES MARKET SPECULATION, which got a lot of attention from anti-market, pro-government, pro-regulation communists, who always want government to "regulate" & takeover everything, more government is ALWAYS their answer, not the markets but Ron understands that it was the Fed & government that was the problem so "regulating" the speculation won't do sh!t; similarly just as right now, it's the US-Iran friction that's causing most of the uncertainty in the oil markets & thereby speculators gearing up for a possible future shortage, which is what they're supposed to do anyway - to take risks on behalf of producers/consumers about what the future supply & demand situation might be; those who predict correctly are rewarded while those incorrect lose money & are eliminated from the market sooner rather than later

 

[ILUVRP]

PON 2 , why does someone that disagrees w/u a commie , you really have a problem .

i will remind you today , don't forget to take your pills .

 

[ILUVRP]

HB "srsly? Big Oil's CEO compensation is none of your damn business. "

show me where i have EVER said anything about CEO compensation . i said co's ( companies ).

i agree it is no one's business except share holders / board of directors what any ceo makes.



TFH , what is it i am missing here , i did say above that we export about 120 million a day , the $4 billion that the american tax payer give to oil companies is in the form of sub's.

good grief .

as far as a sound $$ goes , as far back as i can remember the only sound currency in the world is the swiss franc.

the dollar has been a POS since 1913 , it always will be .

i don't want HB and TFH to miss my answer , they may think i forgot about them .

 

[Aurave]

"Many a progressive would love for gas, oil, gold, and silver to price controlled and consumption limited (rationed). Thanks for supporting their agenda. "

i have never said anything about controlling any market , raising the margin requirements on only crude oil is not controlling anything , controlling over $100,000 worth of crude with about $6,000 is very stupid , if the true hedgers want to hedge then they could do so with 70-75% magrin and make them take delivery of the crude when the contract expires. if they honestly think crude oil is heading higher ( thats why they headge on the long side ) then they will still do great.

i repeat i am not saying anything about metals-grains-softs or any other commodity , i was trading gold/silver when the CFTC came down on hunt-an arab-a south anerican when they tried to corner the silver market , the cftc raised margins , limited the number of contracts a non heager could have ( hunt should have bought a small silver mine before he started ) , all of which were wrong . hunt went on call for hundards of millions of dollars , it broke him.

who really cares how high silver/gold goes , no person needs either , we can't eat them or burn them in our cars/trucks/trains/planes , some heavy hitters must have been very short the silver mkt so they changed the rules of the game , thats all it is .

if they want to play the crude oil game then they will have to pay more , it would not effect the true hedgers like South West Airlines.

i will add rep boehner had it right when he said obama had all the tools he needs , he has the cftc , to obama its all about getting reelected.

Precious metals have no convenience yield. For someone who acts like they know something about futures markets and crude oil it seems obvious you would know that, "speculators" can "corner" and "manipulate" precious metals but its just not possible with anything else. Soybeans, wheat, crude, what ever.

 

[luisOlsen]

It can be yes and it can also be no. it depends on a country's economy.

 

[ILUVRP]

i sort of disagree that "speculators" can "corner" and "manipulate" precious metals " , the reason being the metal g/s , miners ( there are hundards and hundards of them ) know pretty much their costs / yields and if the price gets too high for them because of pumping up the price of gold , the miners will sell forward more of their production , thus driving down the price .

also there is a threat of goverments selling gold , the metat markets are really one of the most stable markets being traded. it will have spikes (both ways ) now and then , there is always the threat of people cashing out of the big gold funds , making funds sell gold to raise cash.

metal mkts to me are one of the more stable mkts , unless there is a complete melt down in the world . over time gold should go up in a steady climb as all the easy to find/mine has already been found.

as far as grains , there is always the weather scare , too much rain/too little rain .

 

[Black Flag]

Speculators cannot "corner" a market.

For every buyer there is a seller.

For everyone thinks oil is going up, so they buy now, there is a seller thinking oil is going down, so the sell now.

To blame the cost of a good being manipulated upwards by such a scheme is strange.

 

[Aurave]

i sort of disagree that "speculators" can "corner" and "manipulate" precious metals " , the reason being the metal g/s , miners ( there are hundards and hundards of them ) know pretty much their costs / yields and if the price gets too high for them because of pumping up the price of gold , the miners will sell forward more of their production , thus driving down the price .

also there is a threat of goverments selling gold , the metat markets are really one of the most stable markets being traded. it will have spikes (both ways ) now and then , there is always the threat of people cashing out of the big gold funds , making funds sell gold to raise cash.

metal mkts to me are one of the more stable mkts , unless there is a complete melt down in the world . over time gold should go up in a steady climb as all the easy to find/mine has already been found.

as far as grains , there is always the weather scare , too much rain/too little rain .

I cannot comprehend your idiocy, it now seems obvoius that you are just a troll with the handle "ILUVRP" set out to antagonize people. You argue crude futures markets are being manipulated by "speculators", and now that I mention that precious metals are the only commodities that are theoretically even susceptible to the type of manipulation you think is happening for crude, you go on and disagree with everything you previously said.

Obvious troll is finally obvious. At least I hope, otherwise you are a functioning mildly retarded individual.

 

[Madison320]

I think the fact that commodities can change hands at almost no cost is a good thing. Why would a zero cost transaction raise the price of the final good? All these people that think forcing you to take physical delivery would lower the cost are wrong. THAT would drive up the cost.

 

[ILUVRP]

I cannot comprehend your idiocy, it now seems obvoius that you are just a troll with the handle "ILUVRP" set out to antagonize people. You argue crude futures markets are being manipulated by "speculators", and now that I mention that precious metals are the only commodities that are theoretically even susceptible to the type of manipulation you think is happening for crude, you go on and disagree with everything you previously said.

Obvious troll is finally obvious. At least I hope, otherwise you are a functioning mildly retarded individual.

i have never said metals/grains/softs are be manipulated , they cannot be as they trade in a free market , not so with crude oil , look back at history and see how many times the saudies have reduced production because they thought world prices were too low , they have said they will never produce over 10 million ba/day.

at least read how on ICE gs buys and sells crude with jpmorgan to keep the price of crude up .

no person has to buy gold/silver/grains/beef/hogs/treasuries , we do have to eat but we can select what we want , everyone needs fuel .

free markets will always work , prices will even out . crude oil is not a free traded market.

just because people have to pay $4/gal for gas does not mean its worth $4/gal , ask a over the road trucker how he is doing. all other commodities are only worth what someone will give for them.

let me add , i am on 2 other forums , and 6 car forums , i have never seen people call others names because they disagree with them , calling people names does not make the name caller more correct.

 

[The Free Hornet]

i have never said metals/grains/softs are be manipulated , they cannot be as they trade in a free market , not so with crude oil , look back at history and see how many times the saudies have reduced production because they thought world prices were too low , they have said they will never produce over 10 million ba/day.

at least read how on ICE gs buys and sells crude with jpmorgan to keep the price of crude up .

no person has to buy gold/silver/grains/beef/hogs/treasuries , we do have to eat but we can select what we want , everyone needs fuel .

free markets will always work , prices will even out . crude oil is not a free traded market.

Here is a list of oil producing countries. It looks a lot like a list of countries. If the Saudi's are committed to a steady rate of production (as you suggest), then they are doing the EXACT OPPOSITE of what would swing or manipulate the market wildly one way or another. They're like playing poker with a guy who has his cards face up on the table for all to see.

As far as the Saudi's not selling oil if the price is too low, hell yeah I say! When someone offers a too low price, you walk. Your complaint is actually evidence of a free market even if the players are unfree countries.

[Saudi Arabia works to settle oil markets]

You bemoan that it's not a free market while you insist on trade restrictions that would ensure that it become even more unfree: regulating speculators, harping on gas exportation, oddly concerned with physical reserves in Oklahoma, and demanding that foreign entities sell more oil because you think they can.

Also, in your argument for gold being a free market distinct from oil, you present solid evidence to the contrary:

also there is a threat of goverments selling gold , the metat markets are really one of the most stable markets being traded.

Gold is far more government controlled than is oil:

http://en.wikipedia.org/wiki/Gold_reserve

Are you sure you are complaining about the right unfree market? It just seems like you have an oil bug up your ass. Gold is something mined/refined very slowly with accumulation largely in government hands (or central bankers). The miners are small in comparison. On the other hand, oil is controlled by production. The actual reserves are dwarfed by usage. Rebels can storm oil fields but I have yet to see the rebels that storm a central bank.

You have not presented any evidence for oil as an exception to the rule. More so, you failure to understand basic economics and do not recognize the value of oil speculation regardless of the market's underlying nature.



Edit/added: SERIOUSLY! How can you complain about private reserves of oil in Oklahoma!?!?!? Is your definition of a free market one with all the major reserves held by government entities like with Gold? Do you think a free market is one where people are not allowed to speculate and are forced to sell the moment they come into contact with a commodity at a price to your liking?

 

[The Free Hornet]

Sorry to keep posting, but I must point out that what ILUVRP claims can't happen in gold, has happend in gold and he admits as much in the second quote:

i have never said metals/grains/softs are be manipulated , they cannot be as they trade in a free market ,

also there is a threat of goverments selling gold , the metat markets are really one of the most stable markets being traded

In The Richter Report, it is suggested that Greenspan openly admits to gold price manipulation:

On July 24, 1998, Alan Greenspan testified before the House Committee on Banking and Financial Services. In pertinent part, he testified as follows: "...private counterparties [cannot] restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise." Please think about the words you have just read. Mr. Greenspan ADMITTED that central banks will lease gold into the market if the price of gold rises! That is a confession!

I am *not* complaining about the manipulation of gold. If it is occuring, we stand to profit by knowing the price is artificially low. The point is that there is zero evidence to distinguish gold from oil as an unmanipulated or free commodity. In fact, it is far easier to manipulate gold than oil. A few central bankers meeting privately have far more power than thousands of individual well operators scattered over a hundred countries.

ILUVRP's definition of a free market, is a government-dominated and controlled market that masks our inflationary policies. They want to rob us blind but not so quickly as to cause us to protect our assets.


Edit/Added: From 1933 to 1974 it was illegal to possess substantial quantities of gold in this country. Is this the free market at work? Or is it free now but it wasn't then?

I've read about FDR doing this in the past, but it never quite sank in - the ramifications. Greatest generation my ass!

With the taint of this, how can that market be free? Wikipedia says most gold holders sent the money to Switzerland but what does that imply regarding "ownership" given the value of physical possession? Again, I am not complaining about the unfree nature of the market. I am just happy we have a market now. But compared to gold, the oil industry looks like the Girl Scouts.

 

[Brian4Liberty]

How does monetary inflation effect futures? Does it change the risk?

 

[ILUVRP]

Every time you pump a $4.00 gallon of gasoline, you put a $1.60 in the pockets of oil speculators.
"Excessive speculation on energy trading facilities is the fuel that is driving this runaway train in crude oil prices." That's what Mr. Gerry Ramm, Senior Executive, Inland Oil Company told the Senate Commerce, Science and Technology Committee


i could post 5 or 6 papers with ceo's/presidents/vice presidents of gs/ennron/marathon and many others saying the same thing about excessive speculation and how its adding $50/ba to crude , but whats the use , no one cares .

my point is raise the margin requirement to 60-75 % , now it is less than $6000 to control over $100,000 worth of crude , also make it that if the money is not in the commodity account to cover the trade , the trade can't be made.

i agree that countries can and do lease gold , the interest rates for the lease's is on kitco home page , left side.

i did say goverments always have the threat to sell gold , who knows why , just trying to help their own currency look better , they have found its a waste of time.the US have had scheuled gold sales in the past , also england sold of a lot of their gold at about $280/oz 10-13 yrs ago . look where its gotten them.

does anyone really care if gold is $5,000/oz , i think 99.9% of the people would like it , goverments would hate it.

also i am not complaining about the oil being stored in chushing,ok , all i am saying they could have 10x that much oil( that would be great ) , the price of crude gasoline would be the same.

the high price of crude oil / gasoline is not because we have a shortage , i have never said anything bad about the oil companies/producers (which i have stock in ) , they are not the problem .

 

[Aurave]

let me add , i am on 2 other forums , and 6 car forums , i have never seen people call others names because they disagree with them , calling people names does not make the name caller more correct.

I'm not calling you names because I disagree with you. You could be talking about unicorns and disagree it would not matter. It's your inability to understand the implications of the inferences you happen to make and the things you say. It bears, in all honesty, resemblance to mild retardation. I'm glad you are functional and can type sentences online, but it's apparent time spent in any type of dialogue with you would most likely be time wasted.

 

[Aurave]

How does monetary inflation effect futures? Does it change the risk?

Entities that participate in futures markets anticipate expected inflationary effects and that is added into the cost of the contract. This assumption is bundled into the interest premium of any contract. It is very odd to see a futures price that is lower than the spot price of a commodity for any lengthy period of time, it means a major event has or is expected to take place. In a normal market, over time, the price of a futures contract will slowly converge (from high to low) downwards to the spot price. All things being equal, there is nothing inherently changing the value of that crude futures contract as it nears its delivery, the price drops as it matures are expected as the value of that "interest premium" diminishes.

Beyond that, monetary inflation effects are the same generally as they would be for anything else.

 

[ILUVRP]

I'm not calling you names because I disagree with you. You could be talking about unicorns and disagree it would not matter. It's your inability to understand the implications of the inferences you happen to make and the things you say. It bears, in all honesty, resemblance to mild retardation. I'm glad you are functional and can type sentences online, but it's apparent time spent in any type of dialogue with you would most likely be time wasted.

one thing , i have never said anything about stopping trading of crude oil futures , i am just saying raise the margins to about 70% from 5-6% of contract value for speculators , as far as TRUE hedgers that take delivery , the margin could be 6% as it is now , its sort of like las vegas , there are $5 to $500 blackjack games , even higher , if you want to play the game you pay.


how is this not free trade , you just have to pay more to play.now about 80% of all trades are specs , not much true hedgeing . at least we will find out what the true value of crude/cracks is.

as far as the distance months prices being higher than the spot month , in gold there is a storage cost of the gold and interest on the money you did not put up on the contract , lets say in a normal market sept gold contract is $12 more than a june contract , 3 months 12$ is $4 a month storeage/interest charge. at times there will be a backwardation price where there may be a delivery problem with the spot month and the spot month will trade higher than farther out months. like said above if someone buys december gold contract it may trade $30 (wag) more than spot gold , if the spot price of gold in dec is the same as it is now you will lost $30 a oz as the price of gold will drop about $4/oz if the spot price remains constant.

the above does not hold true with grains or meats as they tend to be more seasonal .

 

[Texan4Life]

A man in a line up for gas is interviewed.

Interviewer: "Why are you here?"
Man: "Well, I heard gas prices are going up tomorrow, so I want to fill my car and all my spare gas jugs before the price goes up"

Interviewer: "Why do you think the price is going up?"
Man: "It's all those damn speculators buying and selling based on what they think the price and supply will be in the future, they screw up the market!"

lol.. winning