Slog - Comments on Oil Slavery

Comment by Bellevue Ave

Bellevue Ave — Fri, 22 Aug 2008 10:23:28 -0800

and yet futures markets have many good sides to them. do the research on the potential upside for participants in the future markets.

Comment by GK

GK — Fri, 22 Aug 2008 10:46:57 -0800

Interesting. But this is true of all markets: there is no such thing as "perceived demand." Demand inherently includes a perceived component.

Oil has been currency since day one. All paper money is now valued in oil. This has been true since the US abandoned the gold standard, and BBLs of oil were fixed to the US dollar, which is still the case, for now.

So go long on oil companies.

Comment by COMTE

COMTE — Fri, 22 Aug 2008 11:47:52 -0800

Well, that's sort of the whole issue, now isn't it B.A.? Futures markets may be good for those who directly participate in them, either as purchasers of commodities futures, or, as the entity holding the commodity (oil companies, in this case), but other than them, who does it benefit?

Comment by flamingbanjo

flamingbanjo — Fri, 22 Aug 2008 12:17:59 -0800

Charles takes a lotta crap (some deservedly so) but I gotta give props where they're due. This post at least implies the larger problems surrounding our dependence on oil, which goes beyond our material dependence on it for energy and hints at our reasons for resisting any movement away from a petroleum-based economy. We've been hearing about "promising new developments that may one day replace oil" for, what, thirty-plus years now? And yet, since the day Reagan moved into the White House and mothballed the solar panels Carter had installed, we've been told again and again that the day when we reduced our dependence on oil was at some far-off point in the future, way beyond the horizon, and in the meantime our consumption has steadily ratcheted upward.

The relationship of the dollar to oil as a commodity is at least part of why this self-fulfilling prophesy has come to dominate all discussions about the energy future.

Comment by Bellevue Ave

Bellevue Ave — Fri, 22 Aug 2008 12:45:49 -0800

comte, in the end the consumer benefits because there are hedges against collapse for suppliers.

Comment by Bellevue Ave

Bellevue Ave — Fri, 22 Aug 2008 12:49:06 -0800

and futures markets prevent wild fluctuation of prices for the end consumer.

Comment by Will in Seattle

Will in Seattle — Fri, 22 Aug 2008 13:15:00 -0800

@6 - lol, you actually believe that?

Even the WSJ doesn't believe that - they estimate between 30 and 50 percent of all futures markets are speculators.

Maybe you need some remedial economics classes ... taught in the real world, where $4 million is not middle class and people don't typically own 7 or 11 or 13 houses ...

Comment by eric sic

eric sic — Fri, 22 Aug 2008 13:39:36 -0800

Charles may be amusing (philosophy), annoying (religion), but he's downright stupid when it comes to economics. The quote above has *nothing* to do with speculation it has to do with suppliers. The article itself has *nothing* to do with speculators in the market.

@7: Actually, you're the one in need of a remedial ecomonics class. Speculators allow for liquidity between the time the contract is offered and the commodity is delivered. This helps smooth out huge price swings. Notice I said 'helps' not 'prevents' and people still chase rising prices when they shouldn't, just as they do on eBay for this or that fad.

Comment by Bellevue Ave

Bellevue Ave — Fri, 22 Aug 2008 16:07:53 -0800

yeah, fuck you will.

Comment by Capitalism- proud sponsor of Amanda

Capitalism- proud sponsor of Amanda — Sat, 23 Aug 2008 11:06:23 -0800

This is why I have converted my automobile to run on concrete. I filled the tank, and the mileage has been absolute. And, as a side benefit, it has been getting harder and harder, until, someday, I hope it will become impossible.