Quote from Free Thinker:
the government has an interest in orderly markets because they have to pick up the pieces. we just went through this with the bank bailout.
No, it's the taxpayer who picked up the tab. Not the "Government".
Second, the Government doesn't give a shit about the stability of the system, only in so far as it keeps them elected and allows them to buy votes with taxpayer dollars.
IF the Government truly cared about the stability of markets and value of the dollar, we would still enjoy a gold standard. The savings and loan crisis (and bailout) would have not occurred, nor offshoring, nor the LTCM bailout, nor the Nasdaq bubble (and bailout), nor the housing bubble (and bailout), nor ~1% interest rates for the past 10 years. Nor would the deficit (or debt) be at catastrophic levels. Moral hazard and the concept of "too big to fail" is now institutionalized in our economic lexicon. This will lead to even bigger (and more disastrous) risk-taking in the future, all thanks to Government intervention of the past. But again, apparently we have nothing to fear because the Government is doing "everything it can" to "preserve the stability of markets". What a crock of shit. Government looks out for itself, enriches its Corporate buddies, and when they get in a jam, they get bailed out with YOUR money. That's the system. It's soft Corporate Fascism.
As far as oil, yes, you make a fair point. When currencies depreciate, hard assets (like commodities) become a proxy store of value. This is a law of economics. Keep in mind, not everyone is financially illiterate. Smart money understand the value of hard assets (like oil) cannot be destroyed as it can't be printed like the Government does with fiat currency. What's going in the oil market is a repricing away from fundamentals (demand-supply) towards dollar debasement. This is the way it's always been.
Right now, it's politically expedient to throw speculators under the bus because most voters are stupid. They're dumb. They don't understand the relationship between money supply and prices. The real culprits you want to bitch at are:
1) The Federal Reserve
2) US Treasury
3) US Congress
Those 3 institutions are entirely responsible for the aggregate quantity of dollars in circulation, current and future. THEY determine commodity prices by printing too much money (and passing budgets that print (or borrow) too much money).
Now if you want to curb long-term speculation in the oil market, fine. But smart money will just shift their money into natural gas. Or brent crude. Or copper. Or gold. Or wheat. Then what? Ban all speculation in those contracts too? Ban all speculation in futures, altogether? Or how about we just ban those speculators who are betting on dollar debasement/appreciation? And not those who bet on underlying fundamentals (supply and demand)? But then, how do we identify one from the other, beforehand? How do we know who's betting on fundamentals and who's betting on dollar depreciation? Perhaps you can answer that for us, Sherlock.
