How
Does Oil Speculation Raise Gas Prices!
You're
not paying almost $4 a gallon for gas because
there's a shortage of oil. Oh, no. You're simply
being chumped by Wall Street again, another
chapter in the massive redistribution of
wealth that's been emptying the pockets of
the middle class for the past
30
years.
Rather than give you my second-hand analysis
of the situation I'm going to defer to a much
more thorough article on the subject written
by Josh Clark. Here are the first few paragraphs
to get you started:
The next time you drive to the gas station,
only to find prices are still sky high compared
to just a few years ago, take notice of the
rows of foreclosed houses you'll pass along
the way. They may seem like two parts of a
spell of economic bad luck, but high gas prices
and home foreclosures are actually very much
interrelated. Before most people were even
aware there was an economic crisis, investment
managers abandoned failing mortgage-backed
securities and looked for other lucrative investments.
What they settled on was oil futures.
An oil future is simply a contract between
a buyer and seller, where the buyer agrees
to purchase a certain amount of a commodity
-- in this case oil -- at a fixed price [source:
CFTC]. Futures offer a way for a purchaser
to bet on whether a commodity will increase
in price down the road. Once locked into a
contract, a futures buyer would receive a barrel
of oil for the price dictated in the future
contract, even if the market price was higher
when the barrel was actually delivered.
As in all cases, Wall Street heard the word "bet" and
flocked to futures, taking the market to strange
new places on the fringe of legality. In the
19th and early 20th centuries it bet on grain.
In the 21st century it was oil. Despite U.S.
petroleum reserves being at an eight-year high,
the price of oil rose dramatically beginning
in 2006. While demand rose, supply kept pace.
Yet, prices still skyrocketed. This means that
the laws of supply and demand no longer applied
in the oil markets. Instead, an artificial
market developed.
Artificial markets are volatile; they're difficult
to predict and can turn on a dime. As a result
of the artificial oil market, the average price
per barrel of crude oil increased from $31.61
in July 2004 to $137.11 in July 2008 . The
average cost for a gallon of regular unleaded
gas in the United States grew from
$1.93 to $4.09 over the same period.
So what happened?
=Lefty=
------------
February
10, 2011: "We're going to have a relentless focus on creating jobs." -
John Boehner.
So far the list of Republican accomplishments for 2011 is:
(1) Attempted curtailing of abortion rights.
(2) Attempted defunding of Planned Parenthood.
(3) Attempted defunding of NPR.
(4) Investigating Muslims.
(5) Declaring English as America's Official Language.
(6) Reaffirming "In God We Trust".
(7) Challenging AARP's tax-exempt status.
(8) Approved defunct funding for failed
religious schools.
(9) Attempt to destroy Medicaid.
(10) Attempt to destroy Planned Parenthood
(11) Shutting down the government.
Nope. No job creation here. Move along. Move along.
------------
And
what lies is Fox News spewing lately? Oh, how about forgetting to mention
that Planned
Parenthood cannot use federal funds for abortion services.
Clcik here to help Drop
Fox.
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