Altruistic stance on oil speculation without the right action?

Question

Bernanke said that sepculation is good because there is oil when you need it. This liquidity is good for the market, and he does not see the unstabilizing impact on the rest of the world.

See the article:http://capitalgainsandgames.com/blog/pete-davis/334/dont-blame-speculators.

In the same manner, Alan Greenspan said the housing problem is not the job of Fed to clear up. Yet in the end it is the Fed that has to clear up the mess. Now , Bernanke has the **** in his lpants as a result of excessive lending by gaint mortgage lenders and investment banks. So the question to ask again: who is supposed to ensure order in the financial system? In case of oil speculation, who has the role of regulating margins, price limits and orderliness in the future and commodiy market without any taint of discrimiation and be seen to be doing the right thing? Nice words mean little to the suffering in countries across the world. This is another war of terror on the world.

Answer 1

You are right in most of your observations. But the reality is that we are all very upset and sentimental when some external factors hurt our daily interests. We try to find out whom to blame.

Consider the poor living with less than $1 per day income or consumption. How much do they depend on petroleum oil? There are tens of milions of poor people in the World who does have access to electricity or  ride buses or cars and use very little of goods that are linked to petroleum oil  and related products as an input or fuel or as a transportation energy. These poor people are not affected whether the crude oil is $40 or $65 0r $ 135 or $190 a barrel. When prices suddenly rise sharply, people who use the goods in question have problem of an upset budget. But the only solution is to consume less and less of the good whose price is rising sharply and continously. If I cut my car mileage per week by 10% each time the petrol / gas prices rose and shifted to hybrids smaller cars, I would have had well adjusted to the inflation induced by rapidly rising crude oil prices. When the price of a good continuously rises at a fast pace,it is always a wise thing to do is to purchase at lower prices and sell at higher prices. IT generates bubbles. The bubbles will burst. We have three options: To agitate and blame the powers that be and the speculators, or, cut our dependence on any good each time its price rises and insulate ourselves from inflation and thereby contribute to abatement of inflation or increase our incomes.

The one who takes all the options above with priority on the second and the third wins the battle.