The Ripple Effect from Oil Speculation

I would like to know WHAT our elected leaders are doing to help Americans with fuel prices. Please do not talk to me about supply and demand. Our supplies are at a high – we have put gasoline into the reserves for the past 18 weeks. Do not talk to me about crude oil inventories. Our crude inventories have gone up – and a drop was reported last week – which sent prices higher – because the crude was off the shore in Houston due to heavy fog.

No, what I want to hear our “leaders” talking about is the oil speculation market. The oil futures/speculation market has driven the price of oil to extremes over the past 3 – 4 years. It became a noticeable evil in 2005 when Hurricane Katrina hit the gulf coast. Let me give you a few facts that are on the internet – easily able to be verified through some Google searches. About 8 years ago, there was ~9 billion dollars invested in the oil futures market. It drove prices, but it was not bad. Today, there is over $250 billion dollars in that market. I would not be surprised to hear that most of our elected officials are heavily invested in that market.

It needs to end. Caps need to be set on that market. The Government (God help me for saying this) needs to step in and shut those swindling thieves down. Why do I say that? After all, this is a capitalist society, right? Wrong. This is a closed market. There is no entrepreneurship in this club. I cannot go out and start my own oil company or refinery. It is a closed market. That makes it a monopoly and since the Administration was all interested in Bill Gates monopoly in software, why are they doing nothing about the oil market?

I do not want to hear any more about OPEC or any other influences. OPEC is right. The US has botched this market SO BADLY that it has been one of two driving factors in this recession. Yes, we are in a recession.

When the cost of milk goes from $1.99 to $5.00+ a gallon in less than a year, which is a lot more than the Administration's 18% price increase reported in the news – that indicates stagflation – after all, my salary did not go up to meet that increase. Those price hikes are across the board – ground beef - $1.79 a pound last summer is now $2.99 a pound less than a year later. What is the Administration waiting for? People are giving up out here, for God’s sake – the Administration thinks a stupid $600 check is going to solve this? I cannot believe the House and the Senate would be that stupid.

Do you think Americans are idiots? They know that oil prices drive gas. Gas prices drive food, clothes, and etc prices. Using corn ethanol (another staggeringly stupid move to appease Iowa farmers and the farm lobby) is cutting into the food supply. That in turn raises food prices. It is also forcing ranchers to kill their beef sooner and not replace it. Beef is going to go sky high here in a few months. Then what are people going to eat? WHAT is the Administration waiting for?

Let me go further – at $4.00 a gallon for fuel now – and at least $4.50 or more likely $5.00 a gallon this summer, people will not be able to afford to go to work. I do not want to hear about “public transit”. That solution is not viable in North Texas – and many places across the country. Let me give you my example: with public transit, it would take me 4 hours to get to work – part of that involves a ~2 mile distance that is not spanned by any transit bus. Imagine walking that in the summer heat and then sitting down with clients. Yeah, nice. Then another 4 hours home – adding 8 hours to an 8 hour day. Not very realistic is it?

So, not only can people not afford to go to work, they will not go anywhere. No summer vacation. That tanks your tourism industry. Hotels are hit; the movie industry gets hit further (adding to the fact that no one wants to see their America bashing films); manufacturing is hit because people aren’t buying anything. Then, unemployment rises – and things just get worse.

If our elected leaders do not step in and do something smart –you know – shut down the speculator market on oil; tell the fed to stop cutting interest rates because it devalues the dollar when they cut rates and put more money into circulation – something like that; we are looking at a spiral that could very well result in a 1930’s style depression. Does the President really want that on his watch? I cannot stress this enough – DO SOMETHING before it is too late.