If I were to say that speculating has made us a cannibalistic economy, I would be considered off my rocker.

Wrong! I would like to be more polite, but speculation in the futures market has nothing to do with this situation. At the basest of levels, all investment is, at the heart, "speculation." If there is a hobgoblin to blame, it is government's attempt to control pricing. Prices are the result of an incredible complex interaction of many factors, few of which are in our control. History shows us that the governments who most try to control prices, the USSR, for example, eventually fail as their efforts actually make the problem worse.

Speculation over oil futures or any futures is the most risky area of investments. It is not a place where rich men get predictably richer; were it so, all rich men would engage in it. The futures market carries with it some of the highest risks any investor can face.

We have a government that has obtrusively intruded into the largest oil-producing region of the world for decades, in an attempt to manipulate prices to the advantage of Western oil companies. We should not be surprised the the serpent of our creation turns to bite us.

Let's allow the market to regulate itself. Demand for oil from the rising nations of the Far East is now giving us a run for our money. We no longer can name our price because there are other nations who are more economically healthy and which can finally afford to sit at the table with the big dogs and play poker.

During the housing crisis, the tech bubble crash, the savings and loans failures and the oil crisis of the 70's, the media and government try to find someone to blame and they invariable blame "speculators." while avoiding pointing out the real culprit--government intervention.

If you think we can "pull together to control the oil markets" you are delusional . It is far too late for that. We have become an economic paper tiger that must compete with the real powers of the future for dwindling resources. Nothing like a little pay-back to get the attention, eh?

If you have been paying attention you may have noticed that fuel costs have doubled in the 18 plus months that the Democrats have been in charge of both the House and Senate and with a straight face you ask Congress to do something because the president won't.Get real.

Again I point out the the President can't do anything without support from the House and Senate. He is powerless.

"We have a government that has obtrusively intruded into the largest oil-producing region of the world for decades, in an attempt to manipulate prices to the advantage of Western oil companies. We should not be surprised the the serpent of our creation turns to bite us."... Mike, this was the only thing in your entry that made sense to me, but it seems to contradict the rest of your thesis, ie; "Government intervention is the problem." It is my informed opinion that the culprit for all of the "crisis'," "failures," and "bubbles," you mention, is a direct result of 30 years of aggressive de-regulation legislation by both parties in DC. "Government" per se, just stepped aside and for the most part, allowed industry to regulate itself, (you know, get off their backs.)Whether pharmaceuticals, energy, banking, petrochemicals, the insurance industry, and yes,even commodities trading, they all had their way with Congress, and things turned out badly.(I call it Reagan-gate) So now we know, demonstrably, that regulating industry is a good way to protect Americans from the bad-guys.

If the federal government were in charge of the desert, it would run out of sand.

The government fixes nothing. Even in a crisis.

So let's have them take over health care, too.

Beam me up.......

Re Mr. Der Manouel's point about the federal government messing everything up it touches: He forgot the biggest mess the feds have made. . . the war in Iraq. . . $14 billion a month and "Mission accomplished?"

So I suppose Iraq makes Mr. Der Manouel's point about the federal government not being able to get anything right. To use his own words, the federal government was in charge of the desert (in Iraq), and it ran out of sand.

Mr. Boren, my friend:

I will debate you anywhere, anytime, and anyplace on the war in Iraq.

It is one of the most succesful military operations in the history of the United States.

Quote me on that!

Yeah, I agree with Mike, if you allow that "government" is not to be confused with "we the people", but rather an amalgam of moneyed interests, then yeah, they'll screw it up every time,...they put the insurance industry, (nothing personal Mike,) in charge of our health care and we slipped to 37th? place in the world, with tens of millions of people are in desperate need of medical and dental care and even more faceing certain bankruptcy should they have a catastrophic health issue...an aside to the editor, that "mess" in Iraq puts billions of dollars in sombodies pockets every day, those corporations like this mess just fine and have lobbyists working DC full time, I don't think they lobby for peace or cheap oil.

Everyone speculates---it's called a free market.

Everyday grocery shoppers hunt for products at bargain prices, and may very well buy in bulk. Why? Because they speculate that the price of that product will rise in the future.

A retailer shops wholesale products with the same philosophy. He will buy bulk quantities of products that are priced well below what he can resale them for later, and make a profit beyond the retailer mark-up. Savvy retailers strategize their buying to take advantage of the fall and rise in prices.

Anyone who plays the stock market buys shares today in hopes that the price per share will rise in the future, and a profit will be made when the stock is sold.

The free market is not the problem. Basic economics is that supply and demand dictate prices. Countries like China, and India, and Japan are using more oil than ever before, with their exploiding economies. Thus the Saudi's can dictate higher prices, with the increase demand. Thus, if we begin using our own domestic resources (oil, nuclear, coal), the price will go down. I think, just the announcement will cause the price per barrel to drop, because the Saudi's would prefer if we remain dependent on them for oil.

Increasing domestic resources with today's technology should be the short term solution, with long term goals to accelerate development of alternative energy sources. This, by the way is Senator McCains energy plan. It common sense.

Living around Fresno for 56 years, part of it inside the loop, one gets to know the players. I carefully avoided the local fanatic Right as well as the Left. Their rhetoric is so devoid of objectivity, fairness and historical substance, that listening to hem is an exercise in intellectual self-flagellation.

About a month ago, I found what is called a BLOG. I have participated ever since. But I think my opportunity to give my two cents worth seems to have gone to hell in a hand basket. A right hand basket. I avoided the extreme Right in vivo, and I am not going to rub elbow with them in cyber space vitro.

I too believe that the war in Iraq is successful. It has achieved what it had set out to do. But not its military strategy will go down in history. Napoleon Bonaparte fought brilliant battles till the Russian Winter done him in. General Mc Auliff brilliantly fought the Battle of the Bulge. And there were so many other outstanding US military actions.
Iraq isn't one of them.

But handing the front as well as the hinterland over to the Black Waters, the Halliburtons, the Bechtels of this world, while the GIs are being plucked off one by one while protecting the interests of those war profiteers is short of usurpation. Raking in huge sums of tax dollars for meals that are never being delivered to the troops, and other rip offs is stealing from the American people in mega ways the mafia in its hay days could only dream about.

And even right here in Fresno, if one belongs to the right crowd, one gets away with stealling from orphans. I had to get that off my chest, though it has nothing to do with oil stocks.

now back to speculating in oil.

I still don't know the difference between a stock, a bond, a future, a
commodity or what else there is in securities. I know that I don’t have any.

But I recognize the pulpit for laissez faire economics, the advocating of laissez faire government. The message is always quite un-ambiguous...government keep your nose out of the business of business! Though those two little French words only translate to "allow to do" it managed to do incalculable social damage during the era the "robber barons" with its concurrent doctrine of social Darwinism, easily the most vicious based on wealth,antisocial doctrine to hit America. Not being rich was natural for the unfit. They lacked the habits of being industrious and thus lost out on the struggle for profit. Any attempt by government to relieve poverty was to defy natural law.

(Which is irrelevant to the topic of laissez fair and oil specuation per se
But America does not need a rebirth of Herbert
Spencer's immoral doctrine)

There's a vast difference between shopping for bargains at the grocery store and speculating in oil futures. In the former case, you're buying stuff you're actually going to use, and shopping for bargains puts a downward pressure on prices.

In the latter case, people and institutions are buying oil futures that they have no intention of taking delivery of, and are exerting upward pressure on oil prices. Like the speculation which fed the housing bubble, they are making money for themselves at the expense of the rest of us. It amazes me that some people are so quick to defend this predatory practice.

Mike D - this is the "other" Mike D - are you in business?

The speculators are making a bet - that we won't solve the supply problem. Who can blame them? Their success is inverse to our stupidity and lack of action.

Yep, you're right, Mr. Der Manouel. They're betting that we will keep on squandering petroleum like there's no tomorrow, intead of cutting back on our use and finding alternative, cleaner energy sources. So far they seem to be winning this bet.

I one-hundred percent agree with the last statement by the other Mike D.--Mike der Manouel, Jr.

Thanks for offering a voice of reason. Lord knows, this blog, and this country needs more of that.

So the "other Mike D." and Redpeach are quite happy with the fact that we are all paying a lot more money for gas, and our economy is suffering so that a handful of rich speculators can get even richer?

And that's the "voice of reason"?

Mike D.

Who said anything about being happy, or sad, or otherwise, regarding high gas prices. Why do you spin the words of others like that? I'm beginning to suspect you are a member of the news media.

And who is squandering petroleum? FACTS--our economy runs on oil. We do not have an economy without oil. Oil is the catalyst of capitolism and prosperity. We do not have a viable replacement for oil at this time. Although we have been developing alternative energy sources for 40 years, so far, nothing has panned out. For instances, with all the billions spent on wind generated power, it only accounts for .5% of the energy supply. And even though France and other countries have hundreds of nuclear plants to provide cheap energy, environment wackos and Democrats obstruct our ability to do the same.

So we have no choice, but to continue using oil until we find viable alternatives. We have our own oil, natural gas, uranium, and coal deposits. We put ourselves, our prosperity, and security in peril, if we do not use them!

Once again, Senator McCain's energy policy is to utilize more domestic energy supplies, which would make us less dependent on unstable foreign countries for our oil supply, and at the same time excelerating efforts to develop new alternative energy sources.

Isn't this just common sense? The polls show that the vast majority of Americans thinks so.