Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Posted: Thu May 08, 2008 2:49 pm Post subject: Re: Americans to be banned from overseas oil trading
UncoveringTruths wrote:
threadbear wrote:
What you have happening now, is the Enronization of oil, on a global scale. Enron was responsible for ramping up the price of electricity, in areas like California, due to a relaxing of oversight. They did this during a drought period, when hydro electrical generation was somewhat restricted. They used any real shortages of generation power, to mask manipulation. They withheld supply, taking plants offline when they didn't have to, etc.... This is all part of cleanly documented history, now. Their actions drove Enron share prices through the roof, and fed the derivatives paper monster.
The majors, together with Opec, are doing the same thing now, on a global scale. If you don't think this is happening now, you are extremely naive.
How does restricting American purchasing power on a fungible commodity in a global economy accomplish anything? Does it help out the petrodollar recycling by forcing the exporters to go to American Markets? I am a little confused as what this will accomplish.
It curbs the appetite of hedge funds and other large entities, and drives money flows, elsewhere.
Joined: Sep 19, 2007 Posts: 920 Location: Land of the Tongva tribe
Posted: Thu May 08, 2008 2:50 pm Post subject: Re: Americans to be banned from overseas oil trading
Are "Americans" the only ones speculating on oil? I don't think so.
joeltrout _________________ ENERGY is the basis of our industrial civilization and sustains our standard of living. It is the foundation stone of our national wealth. A nation starved of energy.....will be a nation of starving people.
Posted: Thu May 08, 2008 2:51 pm Post subject: Re: Americans to be banned from overseas oil trading
Quote:
Your comparison, therefore, from a humane perspective, just did a face plant, Smiley.
To err is human.
Look, if I was an American looking for profits I would put my savings in an foreign commodities account. It would protect me from the turmoil in the US financial market, it would protect me from the dollars fall and deliver me a nice bonus from the commodities rise.
The ruling that is currently proposed is preventing just that, but it would certainly not end speculation, as the main volume of investments is not coming from US soil and therefore not subjected to this legislation. It just prevents Americans from participating.
Therefore I think that this legislation has the exact same purpose as the confiscation act, namely to force US investors to invest in America and in the dollar, by denying them alternatives.
Joined: Apr 09, 2007 Posts: 4860 Location: Alaska (its much bigger than Texas).
Posted: Thu May 08, 2008 2:54 pm Post subject: Re: Americans to be banned from overseas oil trading
joeltrout wrote:
Are "Americans" the only ones speculating on oil? I don't think so.
joeltrout
Exactly.
This legislation would leave the Chinese, Indians, and Europeans free to buy oil on the London exchange, New York exchange, Chicago Exchange, new Iranian exchange etc., while Americans, under penalty of law, could only buy oil offered for sale on an American exchange.
Passing laws to restrict our own ability to buy oil doesn't seem very smart.
Posted: Thu May 08, 2008 2:57 pm Post subject: Re: Americans to be banned from overseas oil trading
joeltrout wrote:
Are "Americans" the only ones speculating on oil? I don't think so.
joeltrout
Hardly, but they have the largest piles of money that is losing value, and are desperately seeking safe havens. Do you think other govts might synchronize their interventions with the American govt? Count on it if it causes civil unrest, particularly in developed nations.
Eventually, we will end up with expensive oil, but without the surcharge that excessive speculation brings. For govts, it's a survival issue.
Posted: Thu May 08, 2008 3:00 pm Post subject: Re: Americans to be banned from overseas oil trading
I've got a feeling that just changing a law to prevent the purchase of oil on the global markets will not be as easy as the lawmakers think. It's not like flipping a switch. Aren't some folks already out on a limb in foriegn future markets? How would they renogatiate the delivery sometime in the future to an American market if the purchases have already been made.
Please excuse my ingnorance on this issue. _________________ It's a cold cold world when a man has to pawn his shoes.
Posted: Thu May 08, 2008 3:20 pm Post subject: Re: Americans to be banned from overseas oil trading
UncoveringTruths wrote:
I've got a feeling that just changing a law to prevent the purchase of oil on the global markets will not be as easy as the lawmakers think. It's not like flipping a switch. Aren't some folks already out on a limb in foriegn future markets? How would they renogatiate the delivery sometime in the future to an American market if the purchases have already been made.
Please excuse my ingnorance on this issue.
We are all ignorant on this issue. No apologies required. Here's an interesting article, regarding commodities and govt intervention. Many investors are jumping off the wheat and rice boat now, as govt intervention is assumed to be in the cards. This could easily happen to the oil markets, as well. The article I'm linking to, doesn't necessarily agree with my point of view, but it's worth a look. If govts are willing to intervene to cool commodity markets (rice is dropping in price, as a consequence), then why would they not do this for oil?
Oil is so over. I give almost the entire rotting complex 10 years and would avoid it like the plague, as an investor. Many of the masters of that greasy universe, and all the little dumbass investors are going to get burned. As a Canadian, I can see it destroying half of our population's retirement funds. Too bad.
Ed Roseman's eruptions:
The argument among the agricultural bears is that grain prices are too hot, too widely publicized in the popular press and eventually will draw some sort of government response to control prices. That might be true, if only temporarily. High oil and gas prices have already made headlines for the last several years, yet prices remain at record highs amid a shortage of about 2 million barrels of crude daily. But when it comes to food, investors should probably take notice because voters have to eat. They do not necessarily have to drive.
Joined: Sep 19, 2007 Posts: 920 Location: Land of the Tongva tribe
Posted: Thu May 08, 2008 3:27 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
Oil is so over. I give almost the entire rotting complex 10 years and would avoid it like the plague, as an investor. Many of the masters of that greasy universe, and all the little dumbass investors are going to get burned. As a Canadian, I can see it destroying half of our population's retirement funds. Too bad.
threadbear,
Do you believe in peak oil? Your above argument leads me to think that you do not.
The high prices today are because of tight supplies. If oil production peaks soon then those supplies will get even tighter and eventually non-existent therefore shooting prices through the roof until true demand destruction takes place.
There is definitely speculation in the market which inflates price but I think that is minimal compared to the supply/demand issues.
joeltrout _________________ ENERGY is the basis of our industrial civilization and sustains our standard of living. It is the foundation stone of our national wealth. A nation starved of energy.....will be a nation of starving people.
Posted: Thu May 08, 2008 3:36 pm Post subject: Re: Americans to be banned from overseas oil trading
joeltrout wrote:
threadbear wrote:
Oil is so over. I give almost the entire rotting complex 10 years and would avoid it like the plague, as an investor. Many of the masters of that greasy universe, and all the little dumbass investors are going to get burned. As a Canadian, I can see it destroying half of our population's retirement funds. Too bad.
threadbear,
Do you believe in peak oil? Your above argument leads me to think that you do not.
The high prices today are because of tight supplies. If oil production peaks soon then those supplies will get even tighter and eventually non-existent therefore shooting prices through the roof until true demand destruction takes place.
There is definitely speculation in the market which inflates price but I think that is minimal compared to the supply/demand issues.
joeltrout
I absolutely believe in peak oil and think that a price in the mid eighties reflects that. Further, I think even if the price rises no further, the entire social focus will shift towards alternatives, because 4.00 per gal gasoline, is onerous for many.
Just before you get the signal, as to which alternative is the best bet, insiders in the corporate elite will, and pile on to the new new thing, insuring oil price will eventually drop. May take 10 years.
It's like Frogger, if you're old enough to remember that game.
Joined: Sep 13, 2006 Posts: 265 Location: Vancouver Island
Posted: Thu May 08, 2008 3:43 pm Post subject: Re: Americans to be banned from overseas oil trading
"They try to maneuver themselves into a position where there are no checks and balances against them. This is what you are seeing now. Government is the only entity large enough to take them on. "
Problem is Government these days = Pirates that have successfully maneuvered themselves into a position where there are no checks and balances against them.
Joined: Sep 19, 2007 Posts: 920 Location: Land of the Tongva tribe
Posted: Thu May 08, 2008 3:45 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
Just before you get the signal, as to which alternative is the best bet, insiders in the corporate elite will, and pile on to the new new thing, insuring oil price will eventually drop. May take 10 years.
I think most people see solar and wind being a big part of that but our electrical grid wont be able to handle that for some years to come. Here is a good article on the oildrum talking about our grid.
threadbear wrote:
It's like Frogger, if you're old enough to remember that game.
It doesn't ring a bell. Born in 82 and really dont remember much before the mid 90s.
joeltrout _________________ ENERGY is the basis of our industrial civilization and sustains our standard of living. It is the foundation stone of our national wealth. A nation starved of energy.....will be a nation of starving people.
Posted: Thu May 08, 2008 4:15 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
I absolutely believe in peak oil and think that a price in the mid eighties reflects that. Further, I think even if the price rises no further, the entire social focus will shift towards alternatives, because 4.00 per gal gasoline, is onerous for many.
Let's see now...who really controls the oil?
KSA? Mexico? Venezuela? Russian Federation? ExxonMobile? Or some mere hedge funds and speculators?
Are we saying that KSA, with all its oil, all its resources, is less of a factor than some group of hedge fund operators? I find that difficult to believe.
And you say that $4.00 gas is onerous for many. Maybe. But when I get on the expressway, I notice lots of other cars - going in both directions. On city streets I see traffic snarls and jams. At the drive-through on fast food places, I see lines. Maybe it is onerous - but not to such a degree that their behavior is changed.
I do suspect the government will do all manner of silly things to oil companies, speculators, and so on - which will guarantee shortages.
Joined: Sep 03, 2007 Posts: 562 Location: Sunny Virginia, USA
Posted: Thu May 08, 2008 4:17 pm Post subject: Re: Americans to be banned from overseas oil trading
I love the socialist attitudes.
Blame America. Control the markets. Drive out speculators. Capitalism is bad. Corporations are evil. We will conquer the world.
Yawn.
The fundamental problem with the oil market is that 95% of the oil is controlled by governments. Most of these governments are anything but lovers of freedom and capitalists. They don't love capitalism but they do love the wealth and technology provided by capitalism. Sadly, this is the very same hypocritical thinking that drives so many socialist.
With 95% of the oil being nationalized, the oil market does not run on the free market paradigm but is a oligopoly market. Further complicating the matter is that open competition has been crushed by the specter of depletion of the resource.
If there is a conspiracy going on, it is not with the oil majors unless it is in conjunction with their governments and/or they truly believe they can keep the knowledge hidden forever. Can you imagine what would happen if it could be proved that Exxon was manipulating the oil prices higher? The American public would go absolutely ape-crap and a number of Exxon executives would likely spend time in jail and lose their assets.
Will there be a move towards socialism/communism in America when TSHTF? If there is it will be because the soft-headed sheeple will run toward anyone promising to fix the problem. The sheeple do not think, do not consider, do not care about anything beyond their fat asses and soft sofas. When the time comes, there will be a lot of sheeple running to anyone promising salvation in without asking a single question.
Those who stand back and do nothing will be as guilty as the evil bastards promising salvation in exchange for civil liberites. It is the same story that is told over and over and who knows, perhaps this time America will prove too tough of a nut to crack. If not, then when the sheeple are rounded up, the wolves will simply take off their lambskins and the sheeple will have the government they deserve; darkness will descend upon the world and everyone will be united in misery.
Except, of course, for the wolves who will feast like never before. _________________ When somebody makes a statement you don't understand, don't tell him he's crazy. Ask him what he means. -- Otto Harkaman, Space Viking
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