Oil oil oil

In your blog about short term cure you advocated our government doing the exact things that, in this blog, you claim to be the big reason for high oil prices.

SPECULATION AND MANIPULATION.

Take some of the SPR and announce it for sale at a million barrels a day to force prices down. You say we should drive speculators out of the market with a false glut (supply manipulation)then you admit you're not an economist and don't know if it will work, then in this post you go back to saying speculation is the big problem. You should be in Congress, as a dem. They aren't economists either but they wanna' pretend they have a cure, and don't even know what the cause of the problem is.

Is speculation the problem only when it is private speculation and the solution when government is the speculator?

Is speculation a problem or solution? Government is, most definitely, NOT a solution, in any role except when they remove the barriers to a free economy.

Glenn Flowers

Thanks for your comment!

You ask whether speculation is good or bad. The answer is simple - it can be both. Just like a hammer can be good (hit a nail) or bad (hit your thumb). Speculation is useful - like a tool or a process.

Price is being driven up to the point where there will be a world recession, so by the same mechanism, I am saying to drive it down. If gov't speculation drives prices over $130, then it is bad. If private speculation drives prices over $130, then it is bad.

Nothing ideological about it.

Also, filling up the SPR is price manipulation since you decrease the supply on the market. Releasing oil from the SPR is also price manipulation. Doing neither is also price manipulation. LOL.

Here's an interesting news blurb.

http://news.yahoo.com/s/ap/20080621/ap_on_re_mi_ea/saudi_oi l_summit

This article states that it is not speculation, but production shortage which is the primary driver for high prices. Ultimately, it doesn't matter, since the solution to both problems is the same. Flood the market with oil.

From my untrained eye, I see a lot of weird positive feedbacks all over the place which makes this thing unstable that also ties into currencies. Of course, I'm not an economist, so what I'm saying doesn't mean anything, but my guesses tend to be decent.