Quote:
Originally Posted by lumberjim
(Post 462773)
apparently, the price is set when they hit the dock, not when they leave the home port. how fucked up is that?
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That pricing is why free markets work so effectively. You would have us implement socialism, communism, or government subsidized prices?
Fictional example of speculation: Market parameters suggest that a severe oil shortage will exist this winter. But oil is currently plentiful. So we should keep oil prices down? Yes according to those foolishly blaming speculation (as promoted by extremist propaganda). Of course not if one believes in free markets.
With plentiful oil, only market prices can send proper messages throughout an economy. Even though oil is plentiful, speculators (working for the benefit of all) run prices up. The market now conserves all summer as instructed by market prices. Then vehicles and homes still have oil six months later.
Speculators are why prices send useful and constructive messages throughout an economy. Speculators are also blamed because 'Karl Rove' types broadcast more Rush Limbaugh propaganda. It works on the naive. Blame someone else. Those who don't understand or appreciate free markets will blindly believe propaganda - blame the speculators.
Those who understand, appreciate, learn, and advocate a free market knew immediately that speculators are the 'good' market forces being blamed by ignorant and self-serving political types. Propagandists directed this 'blame the speculators' message to same people who believed Saddam had WMDs.
Blame the speculators. Then another major reason for higher oil prices - ie falling dollar - is not blamed. A most significant reason for a 60% depreciated dollar: George Jr's administration including tax cuts, "Mission Accomplished", massive government spending including corporate welfare, fiscal mismanagement, encouraging Enron style accounting, protecting 40% too high drug prices, inflation, cost of living increases created by 'stimulating the economy', and other problems that have not yet hit the headlines. Most of the world is not suffering such massive price increases found in America.
Better to tell the naive how to think: blame speculators so that other reasons (ie falling dollar, uncooperative allies who are tired of America blaming everyone else, administration efforts to keep mileage standard down and make passenger cars heavier, etc) does not get blamed. Government that can create bogeymen does not get blamed.
Often those barges are queued; not waiting for price increases. We have burned all the good stuff. Oil all over the world is being held because of sour or heavy type. For example, we must now burn Caspian Sea oil - some of the most sour. The world was built mostly for light sweet crude and assumptions that oil companies will continue to keep prices so low and oil supplies high by innovating. We burned up all the easy stuff as if it would always exist.
Saudi Arabia managed to find another 10 million barrels to add to their exports. IOW a zero increase because Saudi Arabia has no more oil to export. We kept asking the Saudis to increase production while making zero effort to use that oil more efficiently (see repeated posts about the 70 Hp/Liter engine as one example). Reality, as predicted by T Boone Pickens in the 1970s, is now taking revenge.
Who do we blame? People who were warning of this problem for generations? People who stifled innovation to maximize profits? Or the larger number (most of us) who denied all this was coming - even ignored the same history lessons from the 1970s.
