Quote:
Originally Posted by The_Blur
This is part of the free market. You have stocks and trades, and people can make bets on them. You may as well completely outlaw gambling of any kind.
Speculators can make many times the price of a stock on a trade. They can also lose the same amount, so their job is one of many risks. Many of them provide the financial industry with funds that help them operate because they invest their resources.
Eliminating speculation in the US will not end speculation. American companies that make millions per trade will leave the US only to continue their work in Tokyo, London, or some other stock exchange. Even if the investors stay, the taxable money from companies that have to report earnings will go overseas.
Ultimately, there is little that can be done about speculation if the US is the only economic power to limit it. You may as well outlaw the stock market, casinos, or betting on sports. Any proposal to kill speculation will fall flat. Average Joe simply doesn't understand the complexities of this type of investment.
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I'm all for free market, however most things are regulated for this very reason. This type of oil trading was deregulated and look what happened to the avg Joe. We got screwed. As part of that deregulation, you no longer have to hold the commodity you've purchased, making it even more of a volatile situation. Not a good thing when we're talking about a natural resource people rely on.
It would be like a company finding the cure for cancer. Then saying you can only have it for $1M US per dose and you need 4 doses to be cured. I guarantee regulation would prevent something like that. Well, in this case people were choosing gasoline to get to work, or food to eat. Same same as far as I'm concerned.
OH, and I fully understand commodity trading as well as hedge bet trading. I actually looked into it when oil dropped down to $35 a barrel a couple weeks ago. Yeah, you can loose your butt, however the companies involved had SO MUCH buying power they could literally affect the price guaranteeing a significant profit. THAT is what should be regulated to insure things remain "free market" as you say, as that no longer was at that point.