Posted by AzBlueMeanie:
Have you heard the latest joke about "President Obama is responsible for rising gasoline prices"? Not in the way Tea-Publicans tell the joke.
Actually, the real reason for rising gasoline prices today is the same as it was during the 2008 election -- these guys. OK, let me be clear, not these guys in the photo specifically, but speculators in the commodities futures trading and derivatives markets in general.
The rise in gasoline prices has almost nothing to do with energy policy. It has everything to do with America’s continuing failure to adequately regulate Wall Street. Robert Reich writes, Why Republicans Aren’t Mentioning the Real Cause of Rising Prices at the Gas Pump | Truthout:
As I’ve noted before, oil supplies aren’t being squeezed. Over 80 percent of America’s energy needs are now being satisfied by domestic supplies. In fact, we’re starting to become an energy exporter. Demand for oil isn’t rising in any event. Demand is down in the U.S. compared to last year at this time, and global demand is still moderate given the economic slowdowns in Europe and China.
But Wall Street is betting on higher oil prices in the future — and that betting is causing prices to rise. The Street is laying odds that unrest in Syria will spill over into other countries or that tensions with Iran will affect the Persian Gulf, and that global demand will pick up as American consumers bounce back to life.
These bets are pushing up oil prices because Wall Street firms and other big financial players now dominate oil trading.
Financial speculators historically accounted for about 30 percent of oil contracts, producers and end users for about 70 percent. But today speculators account for 64 percent of all contracts.
Bart Chilton, a commissioner at the Commodity Futures Trading Commission — the federal agency that regulates trading in oil futures, among other commodities — warns that too few financial players control too much of the oil market. This allows them to push oil prices higher and higher — not only on the basis of their expectations about the future but also expectations about how high other speculators will drive the price.
In other words, a relatively few players with very deep pockets are placing huge bets on oil — and you’re paying.
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Funny, but I don’t hear Republicans rail against Wall Street speculators. Could this have anything to do with the fact that hedge funds and money managers are bankrolling the GOP as never before?
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The Commodity Futures Trading Commission is trying to limit how much speculators can bet in oil futures — a power it was given by Dodd-Frank. It issued a rule in October, but it won’t take effect for another year.
Meanwhile, Wall Street has gone to court to stop the rule. It’s already won a stay.
I'll add these quick points:
- Dodd-Frank did not go far enough. What we needed was the restoration of the Glass-Steagall Act.
- We also need to repeal whole provisions of the Financial Services Modernization Act of 1999, and Commodity Futures Modernization Act of 2000 that gave rise to exotic trading devices like derivatives and credit default swaps in an unregulated "shadow market" often manipulated by hedge funds. This is the lasting legacy of Bill Clinton, Robert Rubin and Lawrence Summers for giving Sen. Phil Gramm (R-TX) everything he wanted on their way out the door -- to go to work for the banksters of Wall Street.
- The commodity futures trading market needs to restore the "take delivery" rules. Speculators never take delivery of the oil they are "gambling" on, they make their money betting on the price of oil moving up or down. When the market is limited to producers and end users, speculators are driven out of the market.
- President Obama and his Attorney General Eric Holder have failed to prosecute a single bankster of Wall Street. As I have said many times, "somebody's going to emergency, somebody's going to jail." Americans want to see the banksters of Wall Street do the "Wall Street Shuffle" perp walk in handcuffs into a waiting paddy wagon. Bust some banksters, send a message!
And here is a final thought to contemplate. How many of the Neoconservative war mongers who are beating the drums of war for U.S. intervention in Syria and a war with Iran, which is driving up the speculation price of oil and gas at the pump, also have investments in oil and gas from which they are profiting handsomely? Is all this saber rattling for war really just a way for them to profit on their investments? Now there is an investigative journalism report I would really like to see. They can start with Willard "Mittens" Romney's portfolio.