Bought gas lately? Could be that you are buying more than gas--you could be buying a speculators speculation too. Are we being sold a swamp about crude oil and gas prices? Congress is trying to do something about what's called "dark markets." But the bill was defeated. If politicians and legislators don’t reign in the speculators there will be hell to pay at the pump. The bill could have helped to cut the cord that ties oil speculation to higher crude prices:
Legislation is pending in the U.S. Senate that would require the Commodity Futures Trading Commission, which regulates NYMEX, to significantly raise the amount of money, or margin, that speculators have to put up to trade oil futures. This planned bill, defeated today, is controversial as to its effect on oil prices.
Bush bashes desert sheiks
It’s not rumor mill or lie, oil was just under $30 a barrel when Bush took office, it is now $130 a barrel and people are mad as hell. Bush recently tried to “jawbone” his friends into greater oil production but had no luck. Bush along with the Dems and Republicans are complicit. However, can the blame be squarely placed at the door of the Fed?
The Saudis are making it clear that they believe that the price of oil is not borne out by current market price.
The culprits I suspect are the billions banks and the financial sector lost in the housing bubble, recall that?
It's similar to the housing bubble," said Ernie Acebo of Concord, referring to trading in oil futures. "It (oil) will continue to go up, then the bubble will pop," Acebo said. "I think it's a result of commodities trading," Behrens said. "Demand is not that great."According to oil industry analyst Stephen Schork, Behrens and Acebo are right on track. Mercury News
Americans are still reeling from it. So, we could have double-trouble on our hands. There is an oil bubble now—strange coincidence or strong connection? Did the weak dollar cause the rapid crude rise since 2003? The hard evidence points the compass of the needle at the regulation or lack of it for future and market speculation, oil cronies of Bush, Halliburton, hurting banks and the cupidity or stupidity of plain folks. The bill to regulate the speculators was defeated today. So the question remains: Do we really want to make another batch of millionaires on the backs of the $10.00-an-hour-job crowd? I don’t think so.
Article comments
1 - David
A writer for Harpers, I forget who at the moment, said that this nation's economy is now bubble driven. Instead of a bubble happening every once in a while, people getting upset, legislative change happening..., we are getting bubbles every few years, only to pop and then a new bubble takes over, with no legislative activity whatsoever to curb the abuses and excesses. So what is the eventual outcome? We are seeing it in the devaluation of the dollar and the destruction of the global marketplace, first with food. This is because all the fake money generated by people using very easy credit are suddenly finding that banks and other lenders are wanting their money back. Now. Because they see the writing on the wall and want to get out while the getting is good. Imagine when the US's bank, China, comes calling and we don't have the money to pay them....
2 - jamminsue
Just out of curiosty, does anyone know how many barrels of oil the US uses in a day? and, what our processing capacity is and how old those facilites are? These are questions that should be addressed when discussing accessing US oilfileds of any wort, anywhere. Sorry, I honestly do not know.
3 - bliffle
We currently owe the Chinese about $1.5trillion and they are angry that we devalued the dollar. Not good.
David is right, we have a bubble driven economy that flits from one bubble to another. There is too much cash in the hands of speculators. It's a failure of Monetarism: we have monetarized everything imaginable and then mortgaged everything. Thus, we have about $550trillion in monetary paper (representing what economists calll extrinsic value, i.e., perceived value other than what things are really worth) riding on the backs of about $45trillion in capital (representing intrinsic value, i.e., the real irreducible value of things, like houses, buildings, land, etc.)
We're running about 8% margin, just like 1929. Our system has not been able to control margin abuse.
Consider the plight of a Hedge Fund operator who has leveraged some market, then pumped and dumped it, and now has unwanted excess cash. He must join or create the next bubble so he can pump and dump again.
So the huge Hedge Funds leverage another market and create more diaphonous wealth.
And so it goes. A vicious cycle of ever-increasing bogus values. But no one can stand aside for fear of being left behind, so all must participate and hope their timing is good.
We have a gamblers choice between riches and ruin.