OT: The budget according to McCain - Part I

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<snip>
Correction: Cutting taxes *might* raise revenues, as long as the president doesn't also do something to butt-fuck the country by tripling the price of oil.
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Well now, that is an astonishing revelation. Just how does any president control the price of oil? Please enlighten; the rest of the world still thinks OPEC sets the prices.
Joe
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wrote:

Well now, that is an astonishing revelation. Just how does any president control the price of oil? Please enlighten; the rest of the world still thinks OPEC sets the prices.
Joe
======================
You've seen things like this in the news:
"Oil jumped $2 a barrel today on fears of renewed violence in Baghdad". (Actual silly comment from 3 years ago).
Do you need any further explanation about who had the "fears" mentioned above, and how the president is connected with the price of oil?
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Joe wrote:

Start a war in the Middle East and you can pretty much count on oil prices going up.
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Cutting taxes has ALWAYS raised revenues, at least from the time JFK tried it forward. Oil was going to go up no matter what happened because of forces way outside our control.. .think demand from China and India among others and that most oilfields have peaked and even the ones in Saudi are beginning to show down spirals. Yet nobody wants to drill for new. OPEC learned its PR lesson from the 70s. They kept production even while the demand rose substantially, and let the equivalent of the embargo come to them.
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wrote:

Some of the price swings are due purely to people & institutions trading commodities for recreational purposes. That's something which should be banned.
"Oil rose $2 a barrel today on fears of renewed violence in Baghdad." <--Actual funny line from a news story 3 years ago.
Tell me who had the "fears" mentioned above.
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Most of the pundits seem to bandy about a figure that about 10% of the oil price is related to speculation recently. Don't know how they came up with it, but it does seem to be fairly often quoted.
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wrote:

I suspect that if someone really wanted to know who was trading commodities, it would be easy to find out, assuming the exchanges were urged to release the information. They know who owns each trading account.
Why not eliminate that sport? It serves no purpose other than to enrich traders, and the exchanges which earn fees for processing trades. Every little bit of improvement would help.
As far as China's increased demand, that's a handy excuse, but the increased demand does not match the price change. There's also currency involved, of course.
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OPEC is ignoring the rule the founder of the organization stated publically.
member countries shouldnt get greedy or they will find another way.
greed is definetely at work, and despite the oil companies we will find a alternative
new president should have a plan to end oil imports quickly, and have a list of products our country MUST be self sufficent on.
energy, food etc.
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What do you mean by "quickly"? What number of years do you envision?
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not less than 5 yearsm but no more than 10.
if the new president accomplished nothing else in his time in the white house he would still go down as a great president.
A US plan to build algea to ethanol plants nationwide would likely lead to a big boost in production of crude, in the hopes to slow or stop the plan.....
that should be ignored, for the good of our country
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snipped-for-privacy@aol.com wrote:

Oil is fungible. Assuming today's price is $120/bbl, and we open up ANWAR or offshore areas and can produce oil at, say, $50/bbl, why wouldn't the companies that produce the oil sell it at $120 to China instead of selling it domestically?
Adam Smith put this notion of self-sufficiency to rest in the 18th century ("Wealth of Nations") when he said nations should do what they do best and not try - at least through government intervention - to do everything.
Besides, what's "necessary?"
To many, their Blackberry is crucial (Canadian), or their cell-phone (Finland), or their TV (Japan, Korea), or their automobile (Japan). Heck, some people couldn't exist without caviar (Russia)!
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well imagine this,,,,,,,,,,,
mid east countries get mad at US, and refuse to sell oil to america.......
price here skyrockets from short supply.
we should never be that vulnerable.
essentials should be basic industries, war machine type stuff, food etc.....
non essential cheap plastic dollar store stuff.
now imagine a world event occurs, and people refuse to sell food destined for the US.........
is it good to be that beholden to others?
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snipped-for-privacy@aol.com wrote:

Yes it is. This hash was settled in the 1700's. You really should keep up.
I'll say it again: Oil is fungible.
Right now, we get about 15% of our oil from Saudi Arabia plus an equal amount from Algeria, Iraq, and Kuwait combined.
Now if the Arabs don't sell it to us, they'll sell it to someone else, say China. The people who WERE selling to China now sell to us. For example, Canada and Mexico sell us more oil than the Arabs. Then there's Nigeria, Venezuala, Ecuador, Brazil, Russia, and the UK.
It averages out because OIL IS FUNGIBLE!
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wrote:

And it stains rugs like nobody's business.
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Here we go again. Why don't you take a few courses in economics and learn the purposes of the futures markets before deciding what to ban? Pointing the finger at the futures markets for high prices is rather odd, as they have existed for hundreds of years for various commodities and it's only recently that they get blamed for the price of oil. And those making those claims have ZERO evidence to support them. They just pull a number out of thin air and proclaim it to be so. Over the years all the physical commodities have had periods where they have gone way up or way down and for the usual reason: supply and demand.
Futures markets serve to transfer risk. If a cereal manufacturer thinks wheat prices could be headed higher, they can buy futures contracts for future delivery to lock in the price today. If a farmer wants to lock in the price for his crop that won't be ready for harvest for two more months, he can do so. And on the other side of each of those transactions could be another hedger or a speculator. Any reputable economist will tell you that these markets serve a valuable function in terms of risk transfer and price discovery.
And if you did ban them, what do you think would happen? Instead of the USA being the center of the futures industry, it would simply move to London, Hong Kong, or someplace else that understands and values the business.

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wrote:

Here we go again. Why don't you take a few courses in economics and learn the purposes of the futures markets before deciding what to ban? Pointing the finger at the futures markets for high prices is rather odd, as they have existed for hundreds of years for various commodities and it's only recently that they get blamed for the price of oil. And those making those claims have ZERO evidence to support them. They just pull a number out of thin air and proclaim it to be so. Over the years all the physical commodities have had periods where they have gone way up or way down and for the usual reason: supply and demand.
Futures markets serve to transfer risk. If a cereal manufacturer thinks wheat prices could be headed higher, they can buy futures contracts for future delivery to lock in the price today. If a farmer wants to lock in the price for his crop that won't be ready for harvest for two more months, he can do so. And on the other side of each of those transactions could be another hedger or a speculator. Any reputable economist will tell you that these markets serve a valuable function in terms of risk transfer and price discovery.
And if you did ban them, what do you think would happen? Instead of the USA being the center of the futures industry, it would simply move to London, Hong Kong, or someplace else that understands and values the business.
===========================
What purpose is served by one individual person with enough money to make large trades and bump the price of oil? How does that one person's activity serve a useful purpose in the oil market?
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Which one? Haven't seen any evidence of anything other than market forces.
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wrote:

First, I need some information from you.
Actual line from a news story 3 years ago:
"Oil jumped $2 a barrel today on fears of renewed violence in Baghdad."
See the word "fears"? Who had those fears? What type of person or entity?
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JoeSpareBedroom wrote:

Anybody who needs oil. Duh.
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