Palin: Dollar woes show need for energy independence
posted at 10:55 am on October 7, 2009 by Ed Morrissey
Two days ago, British newspaper The Independent reported that a secret cabal of oil-producing Arab states, Russia, and China had conspired to dump the dollar for oil trading, a move which would have seriously weakened our currency and influence abroad. Many publications picked up on this report, written by the notoriously unreliable Robert Fisk, and a round of denials promptly appeared from the named states. Left unexplained by Fisk and the Independent was how these same states, with massive holdings in the dollar (especially China), would benefit in the short or long term by attacking it.
However, it once again showed the risk that the US has in relying so heavily on foreign oil when we have resources at home that could replace a significant amount of it. Sarah Palin made that her message of the day from her Facebook platform yesterday:
All of this is a result of our out-of-control debt. This is why we need to rein in spending, and this is also why we need energy independence. A weakened dollar means higher commodity prices. This will make it more difficult to pay our bills – including the bill to import oil.
In his book Architects of Ruin, Peter Schweizer points out that the Obama administration is focusing primarily on “green energy,” while ignoring our need to develop our domestic conventional energy resources.[5] We’re ignoring the looming crisis caused by our dependence on foreign oil. Because we’re dependent on foreign nations for our oil, we’re also at their mercy if they decide to dump the dollar as their trade currency. We can’t allow ourselves to be so vulnerable to the whims of foreign nations. That’s why we must develop our own domestic supplies of oil and gas.
Though the chant of “Drill, baby, drill” was much derided, it expressed the need to confront this issue head-on before it reaches a crisis point.
Bottom line: let’s stop digging ourselves into debt and start drilling for energy independence.
The year since the last oil shock has pushed this from the front burner for most Americans as prices have stabilized to about two dollars a gallon less than the shock’s peak. The health-care debate has taken its place, and not for bad reasons, either, as it posits a government-mandate model that has allowed our oil reserves to sit untapped for decades. Perhaps the upcoming debate on cap-and-trade will allow this issue to arise once again, although the terms of that debate may force it to share time with issues of taxes, costs, and further mandates.
That would be a shame, because this remains a priority for our economic recovery, and Palin shrewdly seizes the opportunity to raise the issue at a timely moment. We could create tens of thousands or hundreds of thousands of high-paying industrial jobs by opening the coastlines for drilling, most of which would be union labor. It would take a few years to start benefiting fully from the production, but we could be well on our way to keeping dollars at home rather than sending them abroad for our energy needs before then. It would make energy less expensive at a time when we need to reduce energy costs to stimulate the economy in a real way.
Even if we have forgotten the pain at the pump, Drill Here – Drill Now is just as important as it was in 2008 — and considering the state of our economy, perhaps even more important than it was then.
Blowback
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What I don’t hear ever from the Far Left is an objective evaluation of the new technologies available to the oil industry in the 21st c that purport to extract petroleum from the land and the sea without environmental damage.
Instead the Far Left and environmentalist wackos acts like the only drilling methods available to America are the ones used 50-100 years ago. This is completely disingenuous and why I and many others consider environmentalism as a religion because they brook no deviation from their dogma that the preservation of mother nature, its species, its geological formations and the earth itself is more important that the preservation of human life that walks the earth.
technopeasant on October 7, 2009 at 11:41 AM
She’s just brilliant.
deidre on October 7, 2009 at 11:41 AM
I agree. Look at what it did for Jed Clampett, Granny, Jethro, and Elly May.
Are Dems ready to say that they oppose prosperity for families like the Clampetts?
BuckeyeSam on October 7, 2009 at 11:42 AM
It’s their usual strawman way.
the_nile on October 7, 2009 at 11:43 AM
The radical environmental movement is why I call myself a conservationist.
BadgerHawk on October 7, 2009 at 11:44 AM
Well, the discussion is changing, I think.
AnninCA on October 7, 2009 at 11:45 AM
WashJeff on October 7, 2009 at 11:37 AM
I second that!
ZeeMI on October 7, 2009 at 11:45 AM
Along with that is his very short tenure in congress…he never had a chance to build a team of long time expert in various fields.
That is why someone like Bush can come in and put a team together rather quickly, he could draw on his background, and his fathers background and all the relationships and expertise…however, Obama had none of that, so he is choosing people who have no experience, and based solely on how loyal they are to his political left causes. He ends up with czars running the auto, who have no auto experience. Can’t fulfill the economic positions, communists that are “speakers” but not doers, etc.
He has no “depth” to his background, just Chicago street politics, and some professors or speakers he had attached himself to.
Very naive, very superficial….and consequently very dangerous.
I think America is learning a lesson…nice guys, good communicators (and I don’t get that one), are not necessarily good leaders.
right2bright on October 7, 2009 at 11:46 AM
.
One of the biggest opponents of drilling in ANWR is the S.E.I.U. and Andy Stern. The losers are the Teamsters.
Buy Danish on October 7, 2009 at 11:46 AM
Geez, I could use a job, even if it is a union job. I do not understand why this country’s leaders are so boneheaded. We have trillions of dollars sitting in the ground all over this country, why can’t we access it?
kcarpenter on October 7, 2009 at 11:46 AM
I didn’t notice who posted this when I clicked/read. I assumed it was AP (he ALWAYS posts the Palin threads). When I arrived at that sentence, I had to go back up and see who wrote it… I couldn’t believe it would be AP.
It wasn’t.
CC
CapedConservative on October 7, 2009 at 11:46 AM
The “Green” discussion is in danger of becoming a bit like the Yogi Bear chiding advertising push by the government in the 60′s. OK, so we won’t litter.
That’s hardly relevant at this point.
AnninCA on October 7, 2009 at 11:46 AM
If we save even one pelican from dying in an oil spill, it is worth destroying the American economy forever!
(Channeling enviro-fascists)
profitsbeard on October 7, 2009 at 11:46 AM
Time to start finding real energy solutions: nuclear, natgas, domestic oil, oil shale, coal.
Solar, wind: dirty power, poor performance.
Stop underwriting GE and BP with subsidies. They purchased those crappy “clean energy” companies. Let them choke on them, or make them competitive in a free market.
spmat on October 7, 2009 at 11:47 AM
“What I really like about Sarah is that I personally thought that she should establish her credibility issue by issue in well-thought out policy stances.”
Indeed. If you think about it, Palin is essentially doing the internet-age version of Reagan’s radio addresses in the 1970s. She’s defining herself and her vision directly to the world via Facebook and engaging in foundation-laying speeches and politicking instead of letting herself be filtered through the Tina Fayes of the world. Keep it up Sarah!!
EasyEight on October 7, 2009 at 11:48 AM
I really hope she’s our next president. More important, I hope we’re still in good enough shape that she can reverse all the insane damage done by the Obama admin.
Daggett on October 7, 2009 at 11:48 AM
Most Dems think we are currently capable of technological advances akin to what they see on reruns of the Jetsons. All we need is some federal funding for Gore-like crackpot groups and we’ll have businesses like Spacely Sprockets and
Cogswell Cogs in no time.
Clean and green? Get serious, Dems. You live in the real world. Hollywood is good for one thing: creating the fantasies that you want to live out.
BuckeyeSam on October 7, 2009 at 11:48 AM
Half the environmentalists subsist on nothing, the other half are from extremely wealthy families (some fly to the protests on their family jets)…so basically you have few that are really effected by any economic downturn.
They protest just to protest…if the oil was seeping our of the soil,they would protest the use of a vacuum…
right2bright on October 7, 2009 at 11:49 AM
This dovestails in with what some have mentioned already.
http://www.facebook.com/note.php?note_id=119471438434
Clyde5445 on October 7, 2009 at 11:50 AM
I completely understand where you are coming from on this one, rockmom. I commute at least 100 miles a day (to and from work), and my “other half” (don’t ask…separated, but still very good friends, thank goodness for the kids) drives people around the county, so she spends a lot on gas as well. The current price of gas is STILL too high for those that actually have to do some using of gas for extended periods every day.
Highlar on October 7, 2009 at 11:50 AM
That’s a connection I wish I had made, myself.
Kralizec on October 7, 2009 at 11:51 AM
And if we can save one minnow, it’s worth driving thousand of farmers and workers into poverty and reducing our food supply by (what was it, 14?) percent, higher prices. Why? Because liberals care.
Daggett on October 7, 2009 at 11:51 AM
Instead we just get crap from WI sewage plants.
WashJeff on October 7, 2009 at 11:51 AM
Fixed
agmartin on October 7, 2009 at 11:52 AM
Yes, and it appeals to me. I don’t want to have to buy either party’s “decoder” ring.
:)
I’m now officially Independent. Either tell me what you support, or go graze elsewhere for votes. I’m done with pundit analysis. I’m done with crystal-ball grazing.
We all know what faces us as a nation and as individuals. So talk straight or I’ll just yawn and move on.
AnninCA on October 7, 2009 at 11:52 AM
Anyone watch Dirty Jobs last night? Funny in a facepalm way all the environmental crap this company had to go through just to take abandoned boats out of the water. Mike Rowe and crew did a good job at mocking the rules.
WashJeff on October 7, 2009 at 11:53 AM
It’s almost like the environmental wackos hate humanity and would like to see much of it (especially conservatives) thrown into a huge bonfire where the animals of the world would delight with laughter and glee and the earth would revert back to a time of what they consider “pristine beauty”.
Really there is not much difference between this concept and “death panels” except the former wants to deprive you while you are healthy while the latter wants to deprive you from care while you are in the gradual process of dying.
technopeasant on October 7, 2009 at 11:53 AM
Drilling for oil here will lower prices about as much as invading Iraq did. Until you reign in oil commodity speculation, the problem won’t end. Domestic drilling is a great idea, as is using resources you have instead of importing them, but when it comes to pricing, it’s somewhat of a red herring.
The Calibur on October 7, 2009 at 11:54 AM
By the way if you did not guess the post was by Gov. Sarah Palin.
Clyde5445 on October 7, 2009 at 11:54 AM
That’s good, but there are equal number of stories about private businesses absolutely trashing the local environments and putting people in danger.
Frankly, it’s just crazy that they were so oblivious.
AnninCA on October 7, 2009 at 11:55 AM
Sarah Palin, 912,277 supporters on Facebook and rising fast (over 20 in the last 20 minutes)…
Join the party!
ornery_independent on October 7, 2009 at 11:56 AM
Heaven forbid! Imagine 30 million more taxpaying citizens contributing to our economy. It would be absolutely atrocious.
jimmy2shoes on October 7, 2009 at 11:56 AM
Don’t you change the speculations based on future sources?
I’m not quite sure I follow you. Oil is a commodity.
AnninCA on October 7, 2009 at 11:56 AM
The last oil price spike ended the same week Bush 43 announded he wasn’t going to renew his father’s ban on offshore drilling. Just the glimmer of a thought that we might someday consider planning to commence to drill, was enough to reverse a loooooong price spike. Imagine what concrete plans, backed by action, would do to the prices, before we even saw drop one of the oil.
Right on, right on. She’s following the Reagan playbook. Sweeeeet.
smellthecoffee on October 7, 2009 at 11:59 AM
Once the information is leaked the market reacts. Risk gets priced into exchange rates reducing future flucuations.
These countries will benefit by setting up places to spend their dollars now. China could have long term contracts already set up in dollars, so if the dollar falls it does not mattter they are simply going to buy the commodity at the contract price for 5, 10, 20 whatever amount of years. That way they protect themselves from our eventual money printing.
Theworldisnotenough on October 7, 2009 at 12:00 PM
The Calibur on October 7, 2009 at 11:54 AM
I respectfully disagree. Unlike the absurd claims of the “no blood for oil” crowd, the evidence since the Iraq war began is abundantly clear that we did NOT invade Iraq in order to get their oil. More to the point, however, increasing the supply of oil will lower the price and put more pressure on OPEC. This is a win-win in my book.
jwolf on October 7, 2009 at 12:01 PM
The Democrats strategy: If it will harm or weaken America and its interests, DO IT!!!!!
DL13 on October 7, 2009 at 12:01 PM
By the way AOL Hot Seat has been conducting a poll over the last several days whether Sarah has a chance for the White House. If you haven’t voted yet please go over and do so.
http://news.aol.com/article/palins-going-rogue-coming-soon/692161
(bottom right hand corner of page)
technopeasant on October 7, 2009 at 12:02 PM
One of the biggest opponents of drilling in ANWR is the S.E.I.U. and Andy Stern. The losers are the Teamsters.
Buy Danish on October 7, 2009
I don’t know what their comparative membership numbers are, but in a knife fight between SEIU and the Teamsters, my money’s on the Teamsters. They have been busting heads for decades. SEIU are pencil pushing pu**ies and second rate bullies.
SKYFOX on October 7, 2009 at 12:03 PM
I like that, conservationist. I fancied myself as an environmental scientist in the 80′s, but since the 90′s, after starting a company and inventing a system involving marine fisheries conservation, I’ve considered myself a conservative green capitalist. But now the whole “green” thing has been ruined by environmental whackos and those who are using it as a means to a massive power grab. So seeing things “green” now makes me wince a bit from the lies and propaganda that support it.
ornery_independent on October 7, 2009 at 12:04 PM
The enviro-nuts seem to forget that the USA need for energy will increase by about 10 to 15% over the next 10 to 15 years. Where is going to come from?? More corn based ethanol that will cause my food prices to go higher?? Wind farms off Cape Cod?? Those are possible now that Teddy isn’t living. ;-)
Sarah was able to get a privately funded natural gas pipeline through Canada approved before she resigned. It may take 10 years to complete, but this is another sign that when it comes to energy policy, Obama and Co., are left in the dark.
The new “green” sources of energy will not even be able to met the increased demand, let alone replace current energy sources. if anyone from the Left has an answer to this, I’m all ears.
ny59giants on October 7, 2009 at 12:04 PM
Sad that this needs to be mentioned. Are not Supply-Demand graaphs usually in the first chapter of economic books?
WashJeff on October 7, 2009 at 12:05 PM
Drill here – Drill now!
petefrt on October 7, 2009 at 12:06 PM
To put it simply, since the majority of capital is concentrated in the hands of a few people, it’s very easy to manipulate the market. If you buy in to oil, the price goes up, and if you buy in enough, you can increase the price of oil by raising “demand.” But it’s not real demand. You don’t really want to use the oil. You want to hold it cause the price will rise. But the price is rising not because people are using oil but because traders are buying it.
Once the big boys think capital isn’t available to rise the price higher, they sell all the oil and prices plummet. Capital becomes restricted when a financial crisis happens for instance. Prices have rebounded because of Federal Reserve liquidity, which also explains the stock market rally while we lose hundreds or thousands of jobs.
The Calibur on October 7, 2009 at 12:06 PM
I didn’t say that’s why we invaded (although it’s a possibility.) I was simply showing the cause and effect relationship between the two events.
The Calibur on October 7, 2009 at 12:08 PM
I want to see Palin’s discussion on healthcare reform, other than the death panel discussion.
That’s very important to me. What say you, really, Sarah?
AnninCA on October 7, 2009 at 12:11 PM
Good for Palin!
joedoe on October 7, 2009 at 12:11 PM
I can only hope you are right.
nyx on October 7, 2009 at 12:11 PM
Who said :
I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 19xx — never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the xxxxs, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade — a saving of over 4-1/2 million barrels of imported oil per day. ?
runner on October 7, 2009 at 12:12 PM
I understand the basics of commodity markets and speculations.
But Wall St. hasn’t ever been connected to jobs. That’s also historical.
In fact, alas, the market will dip when jobs are being filled. That’s also historical.
AnninCA on October 7, 2009 at 12:13 PM
The time has come for nuclear energy.
Oil is well and good and drilling should be allowed in Alaska, Florida, California and other places where there is oil. Just to be fair, we can ask the residents of those states to decide if they want to drill for oil. State control and all.
But nuclear energy is critical as well.
nyx on October 7, 2009 at 12:14 PM
So based on what you wrote, one should create a more competitive environment and more government regulations, which I guess you would support, is not the answer.
WashJeff on October 7, 2009 at 12:14 PM
To a certain extent that is true. However I believe the argument should be as follows:
1. Drill here, Drill now creates thousands of new jobs and stimulates manufacturing to some extent. And this is the best part, without government subsidies pouring in!
2. We are no longer hostage to the Gulf States simply turning off the spigot as a weapon as has happened in the past.
We can’t end speculation but we can increase the supply of oil which indirectly will reign in speculation.
Johnnyreb on October 7, 2009 at 12:14 PM
runner on October 7, 2009 at 12:12 PM
Sounds like Jimmy Carter.
technopeasant on October 7, 2009 at 12:14 PM
yes, correct. It is unacceptable that we are still talking about independence from foreign oil,still, 30 years later , about losing our economic independence due to shenanigans from a cartel of tyrants.
runner on October 7, 2009 at 12:20 PM
You must have missed this.
deidre on October 7, 2009 at 12:23 PM
Ending speculation wouldn’t be too big of a problem. Simply require certain licenses for refiners and manufacturers whom use it and have the SEC investigate suspect price and buy-in spikes. Nothing too heavy or restrictive. What’s a much bigger strain on the economy is traders skimming off the top while people can’t heat their homes. Once that’s under control, we should use all the resources we have.
The Calibur on October 7, 2009 at 12:25 PM
Go scroll through Palin’s face book notes she mentiones HC a couple of times.
Clyde5445 on October 7, 2009 at 12:33 PM
Palin … saying the things squishy Republicans won’t say.
Also, since Palin has more balls than she actually needs, she offering to lend some testicular fortitude to qualified Republicans to help turn off the Marxist path we’ve taken.
darwin on October 7, 2009 at 12:34 PM
I hope AP is looking in……..
TwinkietheKid on October 7, 2009 at 12:35 PM
Huh? The more oil we can get from drilling off OUR shores is that much less oil we have to buy from other countries. While speculators can sometimes drive up the open-market price of crude oil well above the cost of extracting it, if American companies are producing crude oil off our coasts and selling it on American markets, with lower transportation costs, that means money for AMERICAN workers, not foreign kings and tinpot dictators, who have nationalized their oil companies.
Besides, offshore drilling is only a small part of America’s energy resources. The elephant in the room is SHALE OIL under the Rockies. If we develop that (it would take a decade or two, but we should start NOW) we have enough oil to provide our needs for well over 100 years. Develop shale oil, and the USA CONTROLS the world oil market for the next century, and we can buy oil at OUR price, not that of foreign speculators!
Steve Z on October 7, 2009 at 12:37 PM
I’m a huge Palin supporter and I’m always amazed and in awe of her courage and her patriotism but, Sarah if she were to become POTUS, could not begin to fix the mess the Democtats are creating alone. We in every state need to elect Common Sense Conservatives to help her! I think she is wlling to try but she needs the support especially when the Hatefilled Left comes after her if she runs.
CCRWM on October 7, 2009 at 12:42 PM
Liberals 10 years ago: Drilling is impractical! It would take ten years to see results!
Liberals today: Drilling is impractical! It would take ten years to see results!
Liberals ten years from now: Drilling is impractical! It would take ten years to see results!
darwin on October 7, 2009 at 12:42 PM
Yeah if the oil went from our shores to the refiners (who are at max capacity) right to American markets, that would be great. But it goes through commodity markets and onto the global market. We live in a globalized economy. What are you some kind of isolationist? Like I said, I’m not saying don’t use the resources we have, I’m saying focus on making the market work correctly first, then use our resources. Otherwise we’re ignoring the main problem with energy prices, which is how the market works, not lack of supply.
The Calibur on October 7, 2009 at 12:44 PM
It’s almost like the environmental wackos and the Far Left are highly embarrassed or feel intense guilt by the existence an embarrassment or cornucopia of petroleum resources off America’s shores or on American terra firma.
I wouldn’t be surprised at all if Obama eventually apologizes to the world that America is so blessed and that to level the playing field he has decided to take America down the road to a formal permanent “no-growth” policy that justly penalizes America and Americans for the sins of the past and allows the Third World to catch up to America.
Hail, Obama, global citizen!
technopeasant on October 7, 2009 at 12:45 PM
I love Sarah Palin! She is honest, forth right, and doesnt give a hoot about the politically correct path. She’s still talking Drilling while everyone else is entertaining this ridiculous notion of Green Jobs that dont exist.
Dr_Irish on October 7, 2009 at 12:51 PM
While I think the jury is still out as to whether or not it was wise to resign as Governor of Alaska, Sarah Palin is exhibiting keen political sense with regard to the energy issue. While the Republicans in DC appear impotent, she is offering solutions. While the DC repubs say no to this and that, Sarah says yes to domestic energy exploration. While the DC repubs are correct to oppose the ill-conceived leftist policy positions, they offer little as an alternative.
mountainmanbob on October 7, 2009 at 12:52 PM
The Dollar’s woes are not accidental.
True_King on October 7, 2009 at 12:57 PM
Soooo, the enviro wackos say don’t drill here. Do they think the oil drillubg in other parts of the world is MORE eco friendly? They are a joke. We will not be stopped. There will be drilling and mining of our natural resources if we have to drag the left kicking and screaming.
marklmail on October 7, 2009 at 12:59 PM
Forget ‘energy independence’. How about we focus on at least semi-independence in manufacturing and finances? And while we’re at it, why not a few laws to keep companies from selling their countrymen out to cheap foreign labor?
All the energy we can generate will be of little use if China pulls the rug out from under us or our young people have no hope of employment.
Dark-Star on October 7, 2009 at 1:04 PM
This.
The Calibur on October 7, 2009 at 1:07 PM
Just did. Thanks.
I also sent out invites to a few Facebook friends to hop aboard the Cuda train.
There were a few vile & hateful anti-Palin facebook users that came up in the search. It’ll be so sweet to watch the blood shoot out of their eyeballs (to quote Beck) when she emerges victorious against team Zero in 2012.
UltimateBob on October 7, 2009 at 1:09 PM
Drill here. Drill now.
Drill baby drill!
Mangy Scot on October 7, 2009 at 1:10 PM
She’d make me thrilled if she said, except for tort reform, leave it alone.
Jeff from WI on October 7, 2009 at 1:12 PM
Make this woman CiC now while we still have a chance.
lonestar1 on October 7, 2009 at 1:14 PM
Earthquakes are not a major problem. Standing rigs are made strong enough to withstand largest expected shock, just like buildings are. Floating rigs are not affected by earthquakes.
Drill heads are designed to shut down automatically when a large enough tremblor is detected.
Pipelines might crack, but with the pumps and well heads shut down, there isn’t much oil in them to leak out.
MarkTheGreat on October 7, 2009 at 1:19 PM
Never remains never, regardless of the number of dollars spent on subsidies.
As to the claim that our military spends much money to protect oil interests, that little myth has been well destructed by others all ready.
MarkTheGreat on October 7, 2009 at 1:20 PM
I just love the irony that California and NY would not be in such difficult financial situations if they were harnessing their natural resources (Oil for CA, and Gas for NY). But their enviro-wacko-luddites refuse to allow them to go for it. Heck Andy Cuomo was trying to shut down the Indian Point Nuclear Power Plant, without providing for a replacement.
This kind of stupidity is what you get when your ideology blinds you to reality.
Republicans may want to tout energy independence as a way to improve our economy. Give us a positive reason to vote for the Republicans as opposed to just voting against Dems. Gives us job creation, lowers energy prices, spurs investment, win-win-win.
Iblis on October 7, 2009 at 1:25 PM
From her Facebook page Sarah continues to post common sense that resonates with people who recognize it as common sense. Name one other politician doing the same as consistently as she does? No wonder the pundits and pols don’t consider her qualified. If she were sitting where President Zero Accomplishments/Dictator Appeaser is, they would all be seen more clearly as the numbskull wordsmiths they really are.
wtng2fish on October 7, 2009 at 1:27 PM
The Iraq war was not about oil, and it didn’t increase the supply of oil.
Speculators do not change the long term price of anything. Over all, they make the price of any product more stable.
Those who know nothing about the economy love to rail against speculators, but it’s just ignorance talking.
MarkTheGreat on October 7, 2009 at 1:27 PM
Liquified enviro-nazi’s could make a great alternate fuel. Get some chemist to figure out how to add some oxygen molecules to the mix so it burns cleanly and Voila!
darwin on October 7, 2009 at 1:28 PM
Speculators buy stuff, because they believe that the price will rise later. They do not cause the price rise themselves. If the prices don’t rise, then the speculators loose money.
A group of speculators buy a commodity now, this increased demand can cause the price to increase. Then when the speculators think the price is peaking, they start selling. This increased supply lowers the peak price. Speculators serve to lessen the price swings between peak and trough, they do not affect the time averaged prices. Speculators also take on risk that others aren’t willing to absorb. (If the farmer was willing to handle all the risk himself, there would never have been a futures market in the first place.)
MarkTheGreat on October 7, 2009 at 1:31 PM
The vast majority of those stories are based on lies and or bad science.
MarkTheGreat on October 7, 2009 at 1:32 PM
If they never read the book in the first place, they aren’t likely to read the first chapter.
MarkTheGreat on October 7, 2009 at 1:34 PM
Maybe the USA should try drilling? After that. maybe we should do what China is doing, process coal into liquid fuels. After-all, the USA is he Saudi Arabia of coal, with about 25% of the world’s supply.
You did know you can refine coal into liquid transport fuel, didn’t you? Search google for “Fischer-Tropsch” — it’s 1920s technology and was used by the NAZIs throughout WWII.
tarpon on October 7, 2009 at 1:35 PM
Criminy, so much ignorance packed into two short paragraphs.
1) Rising prices does not increase demand, it suppresses demand. Econ 101.
2) If the speculators caused prices to rise by buying a commodity, they will cause it to fall when they start selling. Econ 101.
3) The whole notion that most capital is held by just a few actors is easily refuted by examing the average wealth charts.
MarkTheGreat on October 7, 2009 at 1:36 PM
I can point out that the sun rising this morning had nothing to do with the price of oil, and it will have just as much relevance as your example.
MarkTheGreat on October 7, 2009 at 1:37 PM
No, no, no … that would help America remain productive and that’s the last thing Obama wants to do. We must all become world citizens, living barely above the poverty line.
darwin on October 7, 2009 at 1:37 PM
You are looking at a third order affect and declaring that it is the main driver.
I don’t know what you mean by the market not being tied to jobs. If you mean that there isn’t a direct correlation between the unemployment rate and the DOW, you are right. However since the two indicators do not measure the same thing, why should there be a relationship.
Stock prices are determined by investors expectations of future profitability. Nothing more, nothing less.
MarkTheGreat on October 7, 2009 at 1:40 PM
Ending speculation would mean the death of capitalism. Which is probably what you were after in the first place.
MarkTheGreat on October 7, 2009 at 1:42 PM
Thanx alot straw man! If you would have read what I posted later you would have seen that I later said:
I was not saying the Iraq war was to get oil I was simply relating the two events. And indeed it did not increase the supply. Not yet anyway. Now that the reserves there are fully open for business, supply should ramp up. But it takes awhile.
Even so:
“Speculators buy stuff, because they believe that the price will rise later. They do not cause the price rise themselves.”
“A group of speculators buy a commodity now, this increased demand can cause the price to increase.”
They do not but they can. Incredible. So in other words, you’re telling me that the increase in oil prices in the last year is due to actual demand instead of Federal Reserve liquidity? I suppose you’re jumping on these green shoots in the stork market as well?
The Calibur on October 7, 2009 at 1:53 PM
wow.. the comments are making my head spin. Maybe Ed should have explained more.
upinak on October 7, 2009 at 1:57 PM
You did know you can refine coal into liquid transport fuel, didn’t you? Search google for “Fischer-Tropsch” — it’s 1920s technology and was used by the NAZIs throughout WWII.
tarpon on October 7, 2009 at 1:35 PM
I can see it now at Kos and HuffPo:
“OMG!! Rightwing blogger crazies want to use NAZI OIL!!! Help us, Obamawon, you’re our only hope!!”
jwolf on October 7, 2009 at 1:59 PM
The rise in oil prices in 2008 was caused by two things: increase in demand, and the drop in the dollar. Speculators cannot cause a change in demand, nor can they control the dollar.
Vashta.Nerada on October 7, 2009 at 2:01 PM
Ummm…
Whut?
The Calibur on October 7, 2009 at 2:06 PM
Can we get a switch-a-roo? Democrats don’t care about the Constitution anyways; they wipe their rear ends with it.
Can we cheat once? Bypassing and not rearwiping?
ProudPalinFan on October 7, 2009 at 2:07 PM
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