I want to continue today following up on what the impact of Mr and Mrs. Phil Gramm's influence in the commodities trading gambling houses of Wall Street has been. If you haven't read yesterday's post...I recommend doing so now.
McCain's campaign co-chair, his close friend and economic advisor, and former Senator from Texas, Phil Gramm, the man McCain calls a "principled conservative"...has helped those hard working commodities traders by assuring that they avoid any silly government regulation of their industry. You know, the Godfather of Republican Party economics, Ronald Reagan, decreed that government interference in industry and business is America's problem. Phil Gramm did something about that mean old government interference. He, and his wife, made sure that the commodities traders industry wasn't being stifled by any troublesome government regulation or meddling.
An industry infamous for bringing about the Enron scam over electricity pricing in California. An unregulated industry that has primarily led to the current outrageous oil and gasoline pricing.
Today....let's start with "The Most Trusted Name In News".....CNN....
Recent investor interest in commodities is an issue of intense debate. Some analysts believe that commodities investors have boosted the price of crude with speculative trading, treating oil as a hedge against inflation due to the weakened dollar.
But others say market fundamentals are playing a large role in the doubling of oil prices in a one-year span, driven by strong global demand and a shrinking supply. Link
As all good Knee Pad Media folks do, even those who claim they are the "most trusted", CNNMoney can't arrive at any conclusion as to why prices of crude have doubled in one year. The Knee Pad Media's job has been reduced, by the Knee Padders themselves, to the simple task of stenography. These alleged journalists only write down what each side of any "debate" say and call it a day....never any attempt to determine which side is telling the truth....and really....no concern about what truth even means in any given "debate".
The crude oil spike is no exception.
"others say market fundamentals" are what is driving up those prices...and why should a Knee Pad agent seek to find out whether that claim is true or not? Not their job. See...it's a "debate."
Or maybe not....
Oil was at $50 a barrel in January 2007, then $75 a barrel in August 2007.
Over the time since early 2007, U.S. demand for petroleum has fallen by 1 percent and world demand has risen by 1.3 percent. Supplies of crude are so plentiful, according to the Wall Street Journal, “traders of physical crude oil say their market is suffering from too much supply, not too little.”
Iran, for instance, is storing 25 million barrels of heavy, sour crude oil because, in the words of Hossein Kazempour Ardebili, Iran’s oil governor, “there are simply no buyers because the market has more than enough oil.”
Mike Wittner, head of oil research at Societe Generale in London agrees. “There’s various signals out there saying for right now, the markets are well supplied with crude."Link
CNNMoney stenography reports that "others" attribute "strong global demand" for those exorbitant oil prices. Really?
The Reverend is a blogger. Bloggers, naturally, don't know anything because.....well....they're bloggers.
One thing I do know is that if prices of crude oil were 50 dollars a barrel in 2007 and that "strong global demand" for that commodity has risen a "strong" 1.3 percent in the last year, while American consumption has actually dropped one percent....."market fundamentals", though stenographically typed down as a "reason" for high crude prices....don't pass the laughability test in any serious "debate" about why crude is now at 130 dollars a barrel.
If I take a conservative position and settle on 75 dollars as a starting point, instead of 50.....and multiply that 75 times 101.3 percent...the "market fundamentals" would arrive at a current crude price of just about 76 dollars a barrel. Last I checked oil was at 127 per barrel.
Once again, because I'm a lowly, unskilled, and unserious blogger, I must resort to grade school mathematics. At 127 dollars per barrel....divided by 75 dollars a barrel last year....I come away with an increase of 170 percent in one year's time.
Demand worldwide has grown 1.3 percent in the last year...crude oil prices have increased 170 percent.
Seems a bit skewed...don't you think?
The response to these numbers shouldn't be to stenographically type down both sides of an alleged "debate." The response should be to tell Americans the truth.
The commodities trading industry is rigging the price of crude oil in complete contradiction of supply and demand "market fundamentals."
There's really no "debate", at all.
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