{"id":195655,"date":"2008-06-24T17:47:00","date_gmt":"2008-06-24T22:47:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/06\/24\/energy-and-speculation-a-problem-not-so-much\/"},"modified":"2008-06-24T17:47:00","modified_gmt":"2008-06-24T22:47:00","slug":"energy-and-speculation-a-problem-not-so-much","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/06\/24\/energy-and-speculation-a-problem-not-so-much\/","title":{"rendered":"Energy and Speculation&#8230;A Problem&#8230;.Not So Much"},"content":{"rendered":"<p>Well, we have analysts saying that <a href=\"http:\/\/www.marketwatch.com\/news\/story\/gas-could-fall-2-if\/story.aspx?guid=%7B2673C102-68E0-41D9-9C9A-10EE2E723948%7D\">oil and gas are have had twice their price doubled by speculation<\/a>, but I think that this is a load of crap.  I agree with <a href=\"http:\/\/krugman.blogs.nytimes.com\/2008\/06\/23\/speculative-nonsense-once-again\/\">Paul Krugman<\/a>, that the effects are smaller than that.  If you were to argue that there were a 5% effect on the price over the short term, I would buy that, but 50% is way out of ling.<\/p>\n<p>Krugman had a nice picture on the relationship between oil futures, contracts for later delivery, and spot prices, where the oil is delivered immediately: <img decoding=\"async\" src=\"http:\/\/pic60.picturetrail.com\/VOL1689\/10590113\/19633101\/322625725.jpg\" \/><br \/>Simply put, there would be more of a spread if there were more of a speculative effect.<\/p>\n<p>That being said, market volatility, which aggressive speculation exacerbates, does a lot of damage otherwise, so I do support some of the <a href=\"http:\/\/money.cnn.com\/2008\/06\/24\/news\/economy\/oil_legislation\/index.htm?postversion=2008062409\">measures that the Congressis considering in order to reign in excessive speculation<\/a>.<\/p>\n<p>That being said, at its core, we have demand for raw materials outstripping supply.  That&#8217;s why we are seeing things like a <a href=\"http:\/\/www.ft.com\/cms\/s\/0\/bca835f2-4125-11dd-9661-0000779fd2ac.html?nclick_check=1\">96% jump in iron ore prices<\/a>, a market in which there are <span style=\"font-weight: bold;\">no<\/span> futures contracts.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Well, we have analysts saying that oil and gas are have had twice their price doubled by speculation, but I think that this is a load of crap. I agree with Paul Krugman, that the effects are smaller than that. If you were to argue that there were a 5% effect on the price over &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[973,1135,1020,985],"tags":[],"class_list":["post-195655","post","type-post","status-publish","format-standard","hentry","category-economy","category-energy","category-legislation","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/195655"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=195655"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/195655\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=195655"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=195655"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=195655"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}