ModMark wrote: From CNN Money: “Speaking at a World Petroleum Congress panel, OPEC Secretary General Abdulla Salem El Badri said the world has plenty of crude but that the number of barrels of oil changing hands in the financial markets is 35 times greater than the actual supply.
The numbers he cited were 3 billion barrels per day traded on global exchanges, but only 76 million barrels per day in actual supply.
‘Oil resources are clearly plentiful,’ said Badri, a Libyan. ‘Speculation is playing a very important part in inflating these prices.’”
So 1 barrel of oil is traded 40 times on the market.
Traditionally demand for crude oil is determined by the refineries. They are the ones who are buying the oil to refine into products. – in response to Just Drill, Barry
Dear Comrade Mark,
I’m not sure quoting the head of OPEC to make your point is very effective. If anyone has a motive to blame speculators for the price of oil- besides of course Pelosi, Reid and Obama- it would be OPEC.
You also fail to mention the honored Secretary General says later that $100 oil really presents no hardship whatever to consumers or economies. OPEC is quite happy with the price of oil. Instead of doing the Warren Buffett act and blaming someone else, maybe OPEC should just sell the oil cheaper, if they wish to lead by example. I'm guessing like Buffett, they'd rather grandstand than leave money on the table.
Here are other nuggets from the CNN article which you wish we’d avoid:
But others think investor interest is having only a minimal impact. The real cause of high oil prices, they say, is the fact that the world is using an ever increasing amount of oil, and that oil is getting progressively more expensive to find.
"We believe high prices are due to tight supply," said van der Hoeven [of the International Energy Agency].
She didn't mention speculators in her speech, but she did say that production at the world's current oil wells is declining by a rate of 7% per year.
At that rate, the world needs to find and produce an extra 47 million barrels a day by 2035 just to maintain current production levels of nearly 90 million barrels a day.
Plus, I don’t think that you understand the nature of the futures markets where oil trades. The oil that is trading today is just a contract to deliver oil in the future. It’s not today’s oil; it represents the price of all oil to be delivered on some future date. That price is very much different than the so-called “spot” price or current price for oil.
But even if speculators are in oil, again, it’s just a reflection of too tight a supply. Speculators are drawn to assets that have high demand. Anyone who wishes to blame speculators are confusing the symptoms with the disease.
Traditionally, demand for crude isn’t set by refineries but rather by the economy as a whole. The refineries reflect that demand into the crude market.
Anne wrote: I wish Ransom would write an article on how the stock and world market impacts the cost of oil. We could all use an education. Ransom must have penned this article just before Obozo came out with his latest hair-brained announcement that we can derive "fuel" from algae... another renewable energy source. - in response to Just Drill, Barry
The stock markets in general have no real link to oil per se, except perhaps to say that higher oil prices are not good for the stock market over a long period of time.
I expect that just as we saw almost exactly a year ago, oil prices will have a pretty damaging effect on the economy in the next few quarters. I have been projecting that GDP would slow considerably in the first and second quarters of the year, with perhaps a little forward momentum in the second half. Still and all I expected that GDP growth would be around 1 percent. If this latest spike in oil prices continues, however, expect economic growth to be even slower.
More important than the link between the stock market and oil, is the link between prices and monetary policy. One can make the case- and I would make the case- that the rise in oil prices has more to do with steps by the Federal Reserve to keep injecting liquidity into the markets. In short, they are making money readily available to financial markets for investment. That’s one of the reasons why you see asset inflation in gold, oil and even the stock market.
I’m not against a little monetary easing in general, but our problems are not lack of liquidity. There’s plenty of money. What is lacking is confidence.
Even with all of our daunting problems, our challenges are not economic in our country. They are political.
See the next question.
Duke wrote: Yep, when the Republicans implemented Medicare Prescription in 2003; was this a Marxist socialist health care entitlement? Please answer yes or no! - in response to Save the Planet: Lie, Cheat, Steal!
Dear Comrade Duke, Sybil, et al,
Nope, but they were socialist.
As Doug French, head of the Mises Institute wrote recently on Townhall:
Ludwig von Mises explained that one government intervention leads to an endless succession of interventions to deal with the effects of the first and subsequent interventions. Ultimately, it comes down to two choices. "Either capitalism or socialism: there exists no middle way," Mises wrote.
AgrarianDecentralist wrote: Here's a piece from "Skeptical Science" refuting claims about climate science that Vahrenholt has made. And note this particularly interesting portion of the narrative: "Vahrenholt admits he has no expertise in climate science, but apparently his status as 'Germany’s Top Environmentalist' (a title which Vahrenholt appears to have been awarded just recently by anti-climate think tanks and denialists) and his climate 'skepticism' are sufficient for some people to take his climate claims seriously." Apparently that includes Ransom. -in response to Another Enviro Scientist Turns Global Warming Skeptic
Dear Comrade Kulak,
Yes, it does include me. I’m happy to be called a denier.
You’ve pointed out one of the methods that global warming enthusiasts use to try to belittle their opponents. That is, they question the credentials of the opponent. So let’s take a look at Varenholt.
He’s a member of the leftist Social Democrat Party, and was appointed the environmental minister to Hamburg.
He has a doctorate in chemistry and is an honorary professor at Hamburg University. I’m guessing that he knows quite a lot more about pure science and the scientific method used to question global warming than Dana Nuccitelli the author quoted above who only holds a Masters degree in physics and works for a company that makes it’s money “on identifying, reducing, and strategically managing our customers’ carbon footprint.”
It’s funny how the author at Skeptical Science doesn’t mention that he has a financial interest working for Tetra Tech, a company that makes it’s living off of government regulatory schemes. Or that his company has spent around a quarter of a million dollars lobbying the federal government since 2003 while its employees donate to Democrats.
Brightontop wrote: According to one of the documents that came out in last week's scandal, the Heartland Institute plans to pay a federal scientist for his contributions to an annual climate-denial report. The proposed 2012 budget for the institute is one of the more interesting things to come out of the Heartland documents that were passed around the internet, as it includes a $1,000-per-month payment to a Department of Interior employee. -in response to Another Enviro Scientist Turns Global Warming Skeptic
Wow. So Heartland proposes to pay a scientist $12,000 next year to write reports?
Call the New York Times! Global warming enthusiasts had to steal documents to point out the obvious.
As the Atlantic's Megan McArdle wrote: “I would definitely not have risked jail or personal ruin over something so questionable, and which provided evidence of . . . what? That Heartland exists? That it has a budget? That it spends that budget promoting views which Gleick finds reprehensible?”
By contrast, the federal government is spending around $4 billion just this year on climate research. And they aren’t searching for the truth are they?
I’ll make this challenge to greenies out there: I will pledge to be shaved bald, while eating a can of dog food in Zuccotti Park, surrounded by a drum circle of Occupy Wall Streeters and SEIU community organizers, hosted by Bill Maher or Jon Stewart- their choice- if anyone can show me scientifically how the Cap and Trade bill as passed by the House Democrats in 2009 would have reduced the temperature of the earth by even 1 degree Fahrenheit by year 2050.
Truth001 wrote: I rarely say this about your writings, but Mr. Ransom this was a very good article. - in response to This is What a President Looks Like
Ha, ha. It’s one of those things that sounds like a compliment, but is not.
“I have endured a great deal of ridicule without much malice; and have received a great deal of kindness, not quite free from ridicule. I am used to it."- A. Lincoln
Ted391 wrote: To get a better understanding of Lincoln, one needs to read both Sandburg's 'Lincoln' and Thomas DiSteffano's 'The Real Lincoln'. One is sympathetic to Lincoln while the other is not. In either case the only conclusion a reasonable mind can reach is that Lincoln is the genesis of a big, centralized government in Washington, DC. For those of us who like smaller government and more individual liberty, we are unable to join the author in his adoring praise. - in response to This is What a President Looks Like
I don’t think you are being fair to Lincoln when you blame him for creating the modern federal government. Nor do I think that you are being historically accurate.
The biggest contributor to the expansion of the federal government was a not person, but rather persons.
The South’s refusal to emancipate slaves and then their refusal to come into the modern world and give southern blacks equal protection under the law has been responsible for much the of the growth of the federal government.
It was only until the South had been forced to address the civil rights abuses in the 1970s that they finally repaired the economic damage that had been done since the civil war.
Lincoln repeatedly warned about the unintended consequences of the war in his state of the Union address of 1861: “The war continues. In considering the policy to be adopted for suppressing the insurrection I have been anxious and careful that the inevitable conflict for this purpose shall not degenerate into a violent and remorseless revolutionary struggle.”
Dan107 wrote: Santorum can stop with the social conservatism now. He has stated his views quite thoroughly. Now it is time, full time, to hammer away at Obama's fiscal policies, his corruption and his abuse of power. Lay down a steady fire of those issues. - in response to Obama’s Phony Theology Offers Phony Financing on Everything
Santorum won’t stop talking about social issues until he wins the nomination. Even then he probably won’t stop talking about them. He’s a true believer. I say that in the most complementary sense.
The question I have is for the Paulbots: Why is it OK for your messiah to continue to team up with Romney? Paul attacks Newt and Santorum and is rather cordial with Romney.
I know Jesus ate with the tax collectors, but the purpose was to save them. Your messiah just seems to be butt-kissing the “tax collector for the welfare state.”
What up with that? I thought Ron Paul was supposed to be pure like the driven snow.
Joycey wrote: John Ransom, I listen to money talk shows. It seems to me financial people, people who should be more aware than the rest of us about what is coming, it seems that they are ignoring the facts that you just presented. They go on as if our whole economy is not in danger of being run rough shod over. How can our savings be safe with a commie in office? - in response to Obama’s Phony Theology Offers Phony Financing on Everything
Well Obama has handed out a ton of money to Wall Street to play with. He’s allowed them to offload toxic assets to the FHA. And he’s supported the Fed’s liquidity programs, which, if they haven’t benefited anyone else, they certainly have benefited Wall Street.
But you’ll notice that Wall Street has been giving more money to the GOP than to Democrats the last few election cycles. They are pretty good at handicapping races.
Wall Street has an ingrained habit of just wanting to be on the winning side so they at least get a seat at the table.
Wall Street also has bias toward the buy side. They stay in business by promoting confidence in the markets. They don’t want to bring bad tidings to investors.
Generally I agree with them, but for different reasons. I think Obama will not win reelection. Our problems are not economic, but rather political.
Kicking Obama out of the White House is a good first step towards getting things going in the right direction.
LW wrote: John Ransom, Your comments do not support your claim. If you're going to make a claim about the President's "Phony Religion", use facts that support that claim. Your article does a good job of trying to pile on all the things you disagree with about the President, but I have no clue what Bible you're referring to or what taxes have to do with religion. A better title would have been, "Why I don't like President Obama". I'm glad Rick Santorum knows what's in a man heart. We can skip judgment day and just vote for Rick. - in response to Obama’s Phony Theology Offers Phony Financing on Everything
Dear Comrade LW,
I have no idea what Bible you are referring to. I never mentioned the Bible.
Listen, if I was going to pile on all the things that I disagreed with Obama on, I’d write a book- which is a very good idea. Thanks.
But I’m glad you agree that just voting for Rick would be a good option for you.
Waiting for Judgment Day may not turn out that well for you.
That’s it for this week,
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