Wednesday, June 25, 2008

John Kerry Blasts Futures Contract Speculators for High Oil Prices

These photos are from 8 weeks ago. Did oil stocks deplete so much?

Congressional Democrats have found a new slogan, a new “bad word” called “speculation.” The word these days is applied to the high price of gasoline, diesel, and heating oil. Yet, high prices are just what the Democratic nominee wants in order to diminish “consumption”, which has slightly more evil connotations than the word “demand.”

To repeat ad nauseum that increased demand from India and China has put pressure on supply is to miss the point congressional Democrats are trying to make. Multimillionaire John Kerry put himself once again into the fray yesterday to decry the evil speculators on Wall Street who inflate commodity prices by engaging in futures trading. Futures trading is the buying and selling of things you’ll never use yourself but which have great value for others who really need such things. An auto manufacturer or a farm both depend upon fuel oil and must either buy it on the spot market or the futures market. Because of the action of “speculators” in energy commodities, the farmer and the manufacturer must compete with these people to buy fuel. The excitement and panic generated by public oil policy and the Malthusian claims of “peak oil” and “excess consumption” has created a profit bubble unimaginable even to the most reckless and wildly bullish energy speculator.

What’s worse is that Kerry, Obama, Reid, and Pelosi want to keep things that way. Beneath the public jibes, there is a bit of pride in what they have accomplished. Decreased U.S. demand for petrol by political fiat. High profile scapegoats on Wall Street. An economy going into the tank so they can point to Republicans for blame.

They tell us they’re doing the thinking for the “little man,” the poor, dumb guys who ride around in pickup trucks with small power tools and dirt beneath the fingernails. I’ll tell you what the “little guy” wants. He wants to be able to afford to get himself to work and to heat his house in winter. The little guy doesn’t mind off-shore drilling 90 miles off the coast because that’s where the Cubans are drilling for oil. The little guy wants conservation, too, and better mileage from his pickup. The little guy tries to be sensible, practical in all things, even though he knows that he could spend his entire life driving his pickup without using even a 10th of the energy Al Gore and John Kerry use to maintain their lawns and gardens.

Sure, speculators have bid up the prices for oil and other energy commodities. What can be done about it? Should we pass a world-wide law saying that you can’t bid on futures contracts unless you’re going to use the product? And would that work at the U.N? I guess such a law could only apply to the U.S. commodities markets, which is the whole point of the Congressional Democrats anyway. Or perhaps we should allow oil commodity speculation but only to a certain point. When the price reaches that ceiling, all oil commodity speculation in the U.S. would have to stop, rather like a program trading stops on the Dow. That way we’d get rid of those awful creepy money loving commodities traders—they’d go over right way to the Bourse, the DAX, the Footsie (FTSE) or somewhere the hell else in the world. Then we could pass another law prohibiting that. Followed by economic wars with foreign exchanges!

Brilliant! Absolutely brilliant, those congressional Democrats. Things will be much better when they take control of America. Unless the energy bubble collapses before that happens.

No comments: