The blame gets tossed back and forth--too many dollars chasing too little gas, the rise of petrol use in China and India and so forth. The one part of this story that irks me the most is the development of rampant oil speculation--Wall Street and the hedge fund crowd have taken advantage of the deregulation of futures trading and have tied up vast amounts of oil commodities using only about 5 percent margins. And please realize many of these speculators have no use for storing or managing the barrels of oil they buy. They are just "holding" them on paper in hopes that the price will be driven up. Does this smack of what happened in the Enron Scandals a few years back to someone besides me?
Even if it has only a marginal effect, I think people should demand that this vital resource is re-regulated as it was before lax Reagan-Era decontrolling took place. Some experts testified this semi-racketeering was adding 30-40 dollars to a barrel of oil!!!
Obviously, we need to get ourselves off such dependence on oil, period. But its going to take years. Requiring higher margins and getting some of the most predatory speculators out of this vital market would at least ensure some measure of protection for consumers in the short run.
For more info, here's a recent article:
http://www.cbsnews.com/stories/2008/06/23/national/main4203863.shtml
Check out my blog from tonight. I'm trying to do my part. Still, I hear what you are saying - something does have to happen to get things straight.
ReplyDeleteI will do that. Thanks for your interest.
ReplyDeleteIt is true Doug that in the UK public transport is better than in most parts of the US, but the cost of fuel is still disproportionately high. Currently the average price of unleaded petrol is in the area I live around £1.79 per litre that is about US$3.50 per litre. I have recently seen it in some places at £1.39 per litre. The US gallon is about 3.78 litres (less than the UK gallon which is more than 4 litres).
ReplyDeleteSo on current UK prices a US gallon of gas would cost just over US$ 13.
These prices pass on into the costs of public transport systems... as of course everything is affected by high transportation costs driving up general price inflation etc.
So the affordability of alternatives to using a private vehicle increasingly becomes an issue.
There may be better public transport options here but they're not cheap and are now increasing very rapidly in price.
High levels of tax on fuel in the UK make prices higher here than in many other parts of Europe.
The ultimate villain of the piece is undoubtedly US legislation in the shape of the Commodity Futures Modernization Act of 2000 that contains the "Enron loophole..."
The provision allows oil futures to be traded in markets outside of the jurisdiction of the Commodities Futures Trading Commission...licensing the pirates to plunder and stockpile fuel supplies, holding the world to ransom.
If we want to stop this speculative bubble from enriching a few at the expense of all of the rest of us this legislation must be repealed. The pirates must be regulated at the very least.
We are now all caught in a disastrous clinch engineered by the Bush junta on behalf of their hangers on in the futures industry and other bits of the corporatocracy.
On the one had food price speculation and biofuels cause runaway inflation in the food market while oil speculation pushes oil and gas prices through the roof.
In a nutshell the speculators and futures capitalists are prepared to starve the world to death for a new Maserati and a bigger villa in the Seychelles and the US government helps them do this every step of the way.
Food and transportation under the Bush regime has joined drugs, prostitution and arms dealing the as new mafia scams to enrich the global criminal class and to rob everyone, everywhere of everything.
They call this worldwide grand larceny 'the new world order' and 'globalization'.....they are destroying the world and pauperising us all to grab everything of value for themselves.
The one world government of the reptilian mobster class and psychopathic fat cat corporate oligarchy really are the bloated stereotypes they have been depicted as, but since they own the media too they have been airbrushed out of the corporate news.
Why else would Barack Obama have had his induction into the Bilderberg Club in Chantilly, Virginia earlier this month?
I know I am naive, but how sad that people are making so much money while contributing to the factors that are sending the country into a recession.
ReplyDeleteI know this is going to sound heartless, and I am far from heartless, BUT, we've probably already reached the tipping point to disaster as far as the planet, our only home, is concerned. The Union of Concerned Scientists warned us way back in 1992 or 1993 that we were heading toward disaster.
ReplyDeleteWe HAVE to change, and the only way we are GOING to change is to be dragged there kicking and screaming. We are changing our driving habits thanks to high gas prices. I see a pure silver lining to this whole gas price fiasco.
I agree that this might allow some recovery time for planet earth K perhaps, but not like this.....not blatant profiteering enriching the speculators and driving up food costs and the price of other essentials for drivers and non drivers alike. This is sheer piracy I think. I believe that hydrogen (salt water) automotive power might be a solution to the problem, but the same people who are speculating on oil futures are also preventing the more harmonious alternatives from seeing the light of day until they can find a way to corner the sea water market. That's the problem I think.
ReplyDeleteWe got the wake-up call during Carter's administration, and chose to hit the snooze button and roll back over and sleep.
ReplyDeleteI agree a big part of it is commodities speculation--grain as well as petroleum, look how wheat ran up over the winter and is back down now--Maybe you heard Robert Reich on this morning talking about it, have you read his new book "Supercapitalism" about 1950-2000 US history, particularly concerning shift from Federal regulation in cooperation with industry/corporate to the free-for-all mele capitalism that brought us to where we are today. That "sentance" could have used some punctuation, sorry!
That's the chief problem on this topic, all right, AA, and you covered most of the other contributing causes and the chief suspects . Just as someone once said that war is too important to be left to the generals, I believe that energy and health care are too important to the general welfare for any group to escape government oversight. It'll play havoc getting it done over here, but commercial truckers, commuters and just plain folks across the USA, the EU and other locations need to start voting their pocketbooks and not swallow this "snake oil" notion that oil is just another benign commodity like the "widgits" we we're all introduced to in Economics back at school.
ReplyDeleteI agree. Modern consumer life requires these shocks to the system. I hope we can get our leaders to learn by making it very uncomfortable in the November elections for those old-time politicos who wish to just blame "the market". We cannot rely on waiting for GM to promise us nuclear-powered cars or some claptrap.
ReplyDeleteI know truckers (lorry drivers) in Britain have organized protested against high diesel prices--I suspect that will be coming soon here.
You summed it up there,marianne. The "tail is wagging the dog" like crazy.
ReplyDeleteThat's so true. We had a Energy Crisis' in 73-74 and 1979 and then were lulled into dreamland again, when we should have been demanding long-term solutions instead of feel good bromides from oil companies and their cronies in Congress.
ReplyDeleteThanks for the update on Robert Reich, who I think is one of the smarter people on the effects of globalism. I haven't read Reich's book, but it sounds like something I'm very much in the mood to peruse.
This is true. I don't have the answer (well, I do, but people are too greedy to not be greedy) - there's enough for everyone but some want a much bigger slice of the pie. How to change human greed? I wish I had that answer...
ReplyDeleteGas could fall to $2 if Congress acts, analysts say
ReplyDeleteLimiting speculation would push prices to fundamental level, lawmakers told
http://www.marketwatch.com/news/story/speculative-trading-crude-oil-surges/story.aspx?guid={2673C102-68E0-41D9-9C9A-10EE2E723948}
Sounds like John Dingell and others are on the case, which is a hopeful development. Thanks for the link khoreia.
ReplyDeleteNo problem :)
ReplyDeleteI completely agree.
ReplyDelete