POLITICS - posted on January 12, 2009 by Wade Biery
Ok, you’ve always known it was a HUGE lie, what happened with the oil prices last year and the sorry explanations for it, but here’s a LOT more clarity about it.
I’ve shied away from writing about this because of how upset I get about it, but now that 60 minutes has put it all together in a very easy to watch and digest form, I’ve got to help spread the “word” if you will.
A coupla points that need to be mentioned…..1) the economic collapse that we are experiencing right now, is NOT separate from the Oil price debacle, in fact they are very much a part of each other, 2) this thing is why capitalism without regulation does NOT work, in fact CANNOT work.
Capitalism is a system that rewards and encourages greed, and greed inevitably leads to rule bending and breaking, but without rules and enforcement the system will ALWAYS destroy itself, thus becoming the snake that eats it own tail until it is gone……don’t get me wrong, it’s a pretty good system when paired with a social democracy and regulation, providing incentive but requiring responsibility, both to your customers AND society. Without regulation, you get what we have now, a run on the Treasury and a ripping off of the public that boggles the mind in this day and age.
I’m putting the segment from 60 minutes in here, but here’s some of the points I found compelling…..
Oil is traded as a commodity, like stocks, which results in an artificial price, independent of supply and demand….in fact it becomes disconnected from supply and demand to a large degree and becomes much more susceptible to investor perception.
60-70% of all oil contracts are held by speculators, defined here as investors who never actually “buy” oil, or take delivery of it, they buy the contract to buy it and eventually hope to sell it for a profit.
In the last 5 years, speculative (non-delivery) investments in this market went from 13 billion to 300 billion dollars, a rather significant number, and clearly a number that has an effect on the final end user price.
In a given day during the run up of the price of crude oil, 27 barrels were traded each day for every 1 barrel that was actually consumed. That’s pretty indicative of where the price put on some pounds, ya figure?
You CANNOT believe it when these scum from these giant investment companies talk about supply and demand, they are flat out LYING LYING LYING!! Of course they will say that, otherwise they would have to admit that they are generating profits to the detriment of every person on this planet, which is a lot of people to ripoff.
On 9/22/08 the price of oil jumped $25 in ONE DAY! And there was no event like a plane flying in to a building or any other event that could account for it, EXCEPT trading.
M.I.T. did a study which came to this conclusion –
(This study) ….addresses each of the reasons that Wall Street speculators used to justify the higher price.
They are:
*Higher oil demand
*The effect of dollar depreciation
*The danger of political or armed disruptions on oil supply
*The world is running out of oil
(the link to the study is a downloadable PDF file)
There was only one indicator in the upward price of oil….NOT consumer demand…..NOT supply shortages….ONLY investor demand.
*In a commodity market so crucial to the entire economy, with such a direct impact on each person’s life and in some cases their safety, warmth and well-being…such speculation CANNOT be allowed – WB.
Here’s some of the Big Players in this thing, names you’ll recognize – Morgan Stanley, Goldman Sachs, J.P. Morgan, Barclay’s, and even (no, DON’T SAY IT) A.I.G.!! Funny how this kind of thinking seems to be surfacing in every facet of our nation’s problems right now. With NO punishment or restrictions being enacted as of yet.
None of this is illegal as of 2000, ever since this part of the the financial system was deregulated. Interesting that the trading is done IN SECRET – ON PRIVATE EXCHANGES!!??!?!? How can it be that something with this kind of impact is not open to public scrutiny? That’s unbelievable.
Well….one reason is because ENRON wanted it. The same guys who RAPED the West Coast with a private and false market manipulation that actually killed people, and drove the price of electricity up 300%!!
From July 08 to Nov. 08, 70 billion dollars of the money that went in during the runup was pulled back out of the market. During that time the price of crude dropped 75%.
Still think this is all about supply and demand, as we are being told by the Wall St. scum? And guess what? As of now the regulations that govern all this have NOT been changed.
Here’s the 60 minutes segment –
Watch CBS Videos Online
Are you pissed yet?
