What a ridiculous babble from a talented demagogue.
Newt was born in the wrong country. He would have been a real high animal in soviet russia.
[quote]Schwarzfahrer wrote:
What a ridiculous babble from a talented demagogue.
Newt was born in the wrong country. He would have been a real high animal in soviet russia.[/quote]
Care to explain your position? What about his statements do you see as “ridiculous babble”?
Personally, I like his multifaceted aproach to the energy crunch, and think that all three of his points were great.
I like it, but I don’t have a lot of information. Can anyone who disagrees post a rebut?
The first point I agree with whole heartedly. The second, I’m a little iffy on the statistics, as I’m not sure how quickly we could GET our oil, and if that would truly help the price of gas. However, if it keeps money out of OPEC pockets, and has a minimal environmental effect, I’m all for it. The third point. As for nuclear power, I’ve always been for and I’ll continue to be for it. However, can anyone give a link or two about his idea to use the excess power to migrate to a hydrogen energy7 system? His explanation was a bit to breif for my taste.
His first point is totally wrong. Oil “speculation” has no effect whatsoever on oil prices. None. Oil speculation is a system of betting on future prices, not today’s price. It’s like saying that Big Brown won the Kentucky Derby because a lot of people bet on him. Sorry, it doesn’t work that way. Punish the oil speculators? That’s just ridiculous.
An oil contract is NOT actual oil. People are buying and selling contracts, not oil.And most of those contracts will be closed out rather than actually exercised. It’s a common misconception, and I can’t believe he is so ignorant to understand how it works.
The relationship ONLY works in the other direction. Oil prices do effect oil futures contracts, but the futures contracts do not effect oil prices.
[quote]yorik wrote:
His first point is totally wrong. Oil “speculation” has no effect whatsoever on oil prices. None. Oil speculation is a system of betting on future prices, not today’s price. It’s like saying that Big Brown won the Kentucky Derby because a lot of people bet on him. Sorry, it doesn’t work that way. Punish the oil speculators? That’s just ridiculous.
An oil contract is NOT actual oil. People are buying and selling contracts, not oil.And most of those contracts will be closed out rather than actually exercised. It’s a common misconception, and I can’t believe he is so ignorant to understand how it works.
The relationship ONLY works in the other direction. Oil prices do effect oil futures contracts, but the futures contracts do not effect oil prices.[/quote]
Speculative purchasing can also create inflationary pressure, causing particular prices to increase above their true value (real value - adjusted for inflation) simply because the speculative purchasing artificially increases the demand.
[quote]
yorik wrote:
His first point is totally wrong. Oil “speculation” has no effect whatsoever on oil prices. None. Oil speculation is a system of betting on future prices, not today’s price. It’s like saying that Big Brown won the Kentucky Derby because a lot of people bet on him. Sorry, it doesn’t work that way. Punish the oil speculators? That’s just ridiculous.
An oil contract is NOT actual oil. People are buying and selling contracts, not oil.And most of those contracts will be closed out rather than actually exercised. It’s a common misconception, and I can’t believe he is so ignorant to understand how it works.
The relationship ONLY works in the other direction. Oil prices do effect oil futures contracts, but the futures contracts do not effect oil prices.
Zap Branigan wrote:
Speculative purchasing can also create inflationary pressure, causing particular prices to increase above their true value (real value - adjusted for inflation) simply because the speculative purchasing artificially increases the demand.[/quote]
Seems there is a good bit of uncertainty on how this may work.
Listen to Newt’s speech, then listen to one of Obama’s speeches. Any one of Obama’s will do. You will then know the difference between someone with an actual brain (Newt) as opposed to a hippie-activist-naif.
[quote]BostonBarrister wrote:
yorik wrote:
His first point is totally wrong. Oil “speculation” has no effect whatsoever on oil prices. None. Oil speculation is a system of betting on future prices, not today’s price. It’s like saying that Big Brown won the Kentucky Derby because a lot of people bet on him. Sorry, it doesn’t work that way. Punish the oil speculators? That’s just ridiculous.
An oil contract is NOT actual oil. People are buying and selling contracts, not oil.And most of those contracts will be closed out rather than actually exercised. It’s a common misconception, and I can’t believe he is so ignorant to understand how it works.
The relationship ONLY works in the other direction. Oil prices do effect oil futures contracts, but the futures contracts do not effect oil prices.
Zap Branigan wrote:
Speculative purchasing can also create inflationary pressure, causing particular prices to increase above their true value (real value - adjusted for inflation) simply because the speculative purchasing artificially increases the demand.
Seems there is a good bit of uncertainty on how this may work.
[/quote]
I do not know if oil prices will ever fall below current levels but I do know that speculative purchasing can drive temporary inflation.
We shall see.
[quote]Zap Branigan wrote:
yorik wrote:
His first point is totally wrong. Oil “speculation” has no effect whatsoever on oil prices. None. Oil speculation is a system of betting on future prices, not today’s price. It’s like saying that Big Brown won the Kentucky Derby because a lot of people bet on him. Sorry, it doesn’t work that way. Punish the oil speculators? That’s just ridiculous.
An oil contract is NOT actual oil. People are buying and selling contracts, not oil.And most of those contracts will be closed out rather than actually exercised. It’s a common misconception, and I can’t believe he is so ignorant to understand how it works.
The relationship ONLY works in the other direction. Oil prices do effect oil futures contracts, but the futures contracts do not effect oil prices.
Speculative purchasing can also create inflationary pressure, causing particular prices to increase above their true value (real value - adjusted for inflation) simply because the speculative purchasing artificially increases the demand.[/quote]
Yes, speculative purchasing of oil would artificially increase demand, thereby increasing prices, but this would require the buyer to take possession of the oil and have tanks to hold the oil. How many people or companies have unused, certified oil tanks just sitting around empty that they can fill, yet alone having enough to actually affect demand? Plus they need to have capabilities to transport the oil when they sell it. That’s why oil speculation is done primarily with derivative contracts, not actual oil.
The only one I know of who can purchase actual oil in great enough amounts is the U.S. Government, and maybe other countries. The big oil companies can probably hold back their supply in tanks, but only up to the point all the storage is filled. As I understand it, the caverns holding the U.S. Strategic reserve are pretty much full.
The people you want to “punish” are the oil hoarders, not oil speculators.
In fact, to a certain point speculation is actually good. Consider some poor schmoe in the northeast who heats his house with oil. He speculates oil is going up in price, so he arranges a contract with his heating oil company in June to supply oil for the winter at June prices. The heating oil company goes out and buys several oil contracts that guarantee them the June price for oil when they pick it up in December and January. If prices go up, everybody is happy because they locked in a cheaper price. Speculation is good; why punish that?