Soaring oil prices: Two views of why
- Fwd:Here are two views of why oil prices are soaring. If you can find the time to read both carefully, you are likely to get a far better idea of the important issues underlying the rising oil prices.Don St...+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++The Great Oil Swindle
How much did the Fed really know?
By Mike Whitney
30/05/08 "ICH" -- - The Commodity Futures and Trading Commission (CFTC) is investigating trading in oil futures to determine whether the surge in prices to record levels is the result of manipulation or fraud. They might want to take a look at wheat, rice and corn futures while they're at it. The whole thing is a hoax cooked up by the investment banks and hedge funds who are trying to dig their way out of the trillion dollar mortgage-backed securities (MBS) mess that they created by turning garbage loans into securities. That scam blew up in their face last August and left them scrounging for handouts from the Federal Reserve. Now the billions of dollars they're getting from the Fed is being diverted into commodities which is destabilizing the world economy; driving gas prices to the moon and triggering food riots across the planet.
For months we've been told that the soaring price of oil has been the result of Peak Oil, fighting in Iraq, attacks on oil facilities in Nigeria, labor problems in Norway, and (the all-time favorite)growth in China. It's all baloney. Just like Goldman Sachs prediction of $200 per barrel oil is baloney. If oil is about to skyrocket then why has G-Sax kept a neutral rating on some of its oil holdings like Exxon Mobile? Could it be that they know that oil is just another mega-inflated equity bubble---like housing, corporate bonds and dot.com stocksthat is about to crash to earth as soon as the big players grab a parachute?
There are three things that are driving up the price of oil: the falling dollar, speculation and buying on margin.
The dollar is tanking because... http://www.informationclearinghouse.info/article20011.htm
Double, double, oil and trouble
May 29th 2008
From The Economist print edition
Is it peak oil or a speculative bubble? Neither, reallyAFP
AFTER oil hit its recent record of $135 a barrel, consumers and politicians started to lash out in every direction. Fishermen in France have been blockading ports and pouring oil on the roads in protest. British lorry drivers have paraded coffins through London as a token of the imminent demise of the haulage industry. In response, Gordon Brown, Britain's prime minister, is badgering oil bosses to increase production from the North Sea, while Nicolas Sarkozy, the president of France, wants the European Union to suspend taxes on fuel.
In America, too, politicians are haranguing oil bosses and calling for tax cuts. Congress has approved a bill to prevent the government from adding to America's strategic stocks of oil, and is contemplating another to enable American prosecutors to sue the governments of the Organisation of the Petroleum Exporting Countries (OPEC) for market manipulation.
But the most popular scapegoats are speculators of the more traditional sort. OPEC itself routinely blames them for high prices. The government of India is so sure that speculation makes commodities dearer that it has banned the trading of futures contracts for.... http://www.economist.com/finance/displaystory.cfm?story_id=11453090