Social Question

josie's avatar

What does the president expect speculators to do?

Asked by josie (30931points) April 28th, 2011

The president and his AG recently stated that they are going to look into the rising prices of gasoline, by focusing on price manipulation by , among others, oil commodity speculators.

Why?

Speculators don’t know why the gas costs $4.00 a gallon. All
they know is that it costs $4.00 They are nothing but the bearers of bad news.
They are only trying to protect their money from being diluted by inflation.

The person to talk to is Ben Bernanke.

He and the Keynesians at the Federal Reserve are doing it. They’ve increased the monetary base by 160% in less than three years.
Speculators are reacting to that. If I knew anything about it, I would become a speculator too.
Wouldn’t it be more presidential to blame the source of the problem, instead of a straw man?

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24 Answers

marinelife's avatar

The price of oil is rising largely due to increased speculation in it. The speculators are at fault.

Judi's avatar

It seems to me that gas prices always go up the year before an election.

WestRiverrat's avatar

Actually both are at fault. The Federall Reserve policies are fueling inflation, and the speculators are driving up the price of gas by offering more than the current market price for oil that has not yet even come out of the ground.

The way to reduce the speculation is not allow anyone to bid on oil unless they show they have the ability to store or use the oil they bid on.

cazzie's avatar

Petrol prices are in a bubble all their own in the USA.

The system in the US is privatised, so you have a whole host of middle men and speculators that mess with the system.

I don’t think you are completely knowledgeable of the ‘speculators’ President Obama is referring to.

Are you aware of something called the ‘Commodities Market’ and how it works? The bets placed by speculators in Put Options and Futures Trading?

And by the way… the rest of the world thinks your gas is cheap, so stop bloody whining.

josie's avatar

@cazzie FYI. I am not whining about gasoline. I’m whining about the Federal Reserve Board.

cazzie's avatar

@josie I meant, ‘Stop bloody whining, America.’ not just you. (but you are whining.)

josie's avatar

@cazzie
I know. Sorry.

cazzie's avatar

@josie It’s ok. I realise everything is relative, but I wish America would just wake up and do a bit of reading…. on a general basis… that’s all.

Jaxk's avatar

@josie

Maybe you should do a bit of reading yourself. The average Brit pays about 17% of the total income for transportation. The average American pays about 18%. And that’s with the lower gas prices and before the recent doubling in price. Your probably not aware that there is a considerable difference in size and population density between the US and the UK. Hell, you can drive across the UK in a few hours. Here it takes several days. Oregon is bigger than you whole bloody country and that’s just one of fifty states (and not even the biggest). We are about 2½ times the size of all of Western Europe.

“You keep thinking Butch, that’s what you’re good at”.

cazzie's avatar

@Jaxk I’d like to know what those figures you quote are based on. Care to share?

Jaxk's avatar

@cazzie

Sure. Tables 4 and 5 give a comparison between UK and US households. The data is from 2005 but the most recent I could find. As I said, before the incredible rise in gas prices.

Jaxk's avatar

@cazzie

Sorry Figures 4 and 5. Just scroll down to the Pie Charts.

ETpro's avatar

@josie What the President is asked for is an investigation to see if anyone with the money and power to do it is manipulating the Commodities Futures on things like oil and food commodities. That seems a reasonable thing to investigate in the face of a rapid and obviously unwarranted run-up in oil prices. While some grains have suffered this past growing season due to extremes of weather, there are grains in heavy supply that are running up in price along with those with shortages. And there is no shortage of oil. The Futures market may be reacting to a potential cor future shortages in the face of unrest in the Middle East—or it may be being artificially manipulated by investment groups with the clout to do it. And the Fed making interest rates ridiculously low to try to restimulate the economy just makes it all the much easier for well connected large players in markets to make manipulative bets. They can use the taxpayer’s money to do it.

cazzie's avatar

@Jaxk ‘Cost of’ and what an average household chooses to pay ‘as a percentage of income’ are two different things. We have great public transport here and many people use it, and when we do have to run our cars, we pay a higher price for our petrol. Our cultures also view distance acceptable to walk differently. Where you all grab your car keys to pick up bread from the store, we’re more likely to walk.

And the study only includes figures from the UK which is a teeeeny tiny part of Europe.. which you may not be aware. (I thought your comment to @josie was condescending, or did you actually mean me in that reply?)

Jaxk's avatar

@cazzie

You are right. I did mean you and addressed it to @josie by mistake. As I thought your comment was a bit condescending. My apologies to @josie

cazzie's avatar

@Jaxk Well, in THAT case… I am well aware of the geographical set up of the US. I was born there. Raised in the mid-west. My comment referred to the price of petrol, not the percentage of household income that goes toward transportation. (and you have failed to appreciate that the term ‘transportation costs’ is a rather large umbrella and includes more than the cost of filling up a personal vehicle with petrol.)

Your point seems to be expressing the lack of common sense American’s have to live near where they have to travel to. (which I would beg to differ.) My point is simply that our petrol costs more than what you pay there.

and the name’s not Butch.

Jaxk's avatar

@cazzie

If you were raised here I would think you’d be able to understand the differences. The ability to live near where you work is not always possible. Right or wrong we have a major difference in the design and layout of our cities and towns. We started with large open spaces, you did not. We can’t change the design of these towns to fit a British model nor would I want to.

The transportation budget for individuals is a good comparison. When the cost of petrol goes up it affects us much more than it does you. You want to call it whining, I want to call it reality. I find it amusing that you would throw in a superiority attitude because you walk further to the store. Hell when I stayed there I walked further as well. Not because because I suddenly became superior but out of practicality. If I drove to the store there was no place to park anyway. It’s simply easier and quicker to walk.

And the term ‘Butch’ comes from the movie Butch Cassidy and the Sundance Kid. If you haven’t seen the movie, you probably don’t get the reference.

cazzie's avatar

@Jaxk I got the reference. I know the movie.

It’s whining…. grow up. Can’t park? boo hoo. Your petrol is cheaper.

Jaxk's avatar

@cazzie

You keep thinking Butch, that’s what you’re good at.

cazzie's avatar

@Jaxk I’ll keep thinking because that IS what I’m good at. You keep whining… because that is what you seem to be good at.

Jaxk's avatar

@cazzie

Interesting assessment. Let’s see, at the current price of oil we will be sending about half a trillion dollars annually out of the country to overseas countries. Our oil imports account for more than half of our trade deficit. The economy is not growing and our personal budgets are shrinking in a large part due to the price of oil. You call that whining, I call it reality.

If thinking is you best talent, I don’t even want to know about any others.

cazzie's avatar

@Jaxk why do you bring up the trade deficit now?. I was talking about the price of petrol at the pump. You started talking about things unrelated to this and accuse ME of being arrogant for bringing up walking. You’re the one quoting snide lines from movies. Really.

I’m sorry you’re so mad about petrol prices, but don’t take it out on me. I’m just trying to answer this question, until you started attacking me.

augustlan's avatar

[mod says] Flame off, folks. There is no need to make this personal.

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