Obama is back to blaming oil speculation for the rise in oil prices.
“There’s enough supply,” he added. “There’s enough oil out there for world demand. The problem is, is that oil is sold on these world markets, and speculators and people make various bets, and they say, you know what, we think that maybe there’s a 20% chance that something might happen in the Middle East that might disrupt oil supply, so we’re going to bet that oil is going to go up real high. And that spikes up prices significantly.”
Wow, this guy should be a commodity or stock broker with insight like that. The problem is, per usual, what Obama is claiming is not the case. Speculation reduces price volatility, not increases it.
Take a look at the price volatility of two commodity’s. One where speculation is allowed and one where it is not.
Via Adam Smith.org:
Yes, that’s right, onions, where speculation through futures and options has been banned this past 50 years, are vastly more volatile in price than oil is, where everyone and their grandmother can speculate to their hearts’ content.
If you think speculation causes price volatility, just have a look at what happens to price volatility when speculation is banned.
Obama can demonize oil speculation all he wants. However, all his attacks on ‘Big Oil’ and free markets will not change the fundamental principles of economics.
Anything to avoid taking the blame for his own actions. The man is pathetic.
Agreed, Obama will blame everyone else for his actions. It really is becoming ridiculous.
There is always something behind this man’s words. He wants people blaming speculators and not his own actions. How about the FED and QE2…I guess devaluing our dollar has zero to with the price of oil…oh wait perhaps I’m only speculating. Great post Steve. I tweeted.
Good one!
He always needs to blame someone. As the old saying goes, “you can take the organizer out of the community…”