U.S.-EU Energy CEO Forum

[wehadrons]

It's not enough that speculators and hedge funds have wreaked havoc in the economic system first with the internet bubble of 2000, then with housing bubble (still bursting), but now they've turned their attention to oil and food and are currently in the process of running up prices and creating bubbles in those arenas.

[wehadrons]

It represents the Enronification of food and oil in much the same way that Enron caused huge increases in electricity prices for Californians and others a few years ago by manipulating the market. By the way this isn't what caused the collapse of Enron - charging Grandmas in California outrageous prices for their utility bills. That was all perfectly legal.

[wehadrons]

It was their accounting practices that brought them down. Now oil speculators are manipulating an unregulated futures market causing huge increases in the cost of vital products like food and oil. But this time they've found the perfect vehicle for making a killing in more ways than one. The demands for food and oil are only going to increase so they can bid up the prices for those commodities endlessly. The only way they can lose is if demand were actually to decrease.

[wehadrons]

Then prices might come down, and they would be sitting with overpriced futures contracts. But this is unlikely to happen any time soon. The likliest scenario is that, thanks to them, oil and food prices are likely to continue to rise in a virtually unending upward spiral causing widespread food riots worldwide and pain at the pump here at home which will pauperize the middle class.

[wehadrons]

Thanks to the deregulation of the commodities markets in 2000, no one knows the mechanics of how these financial instruments are traded or in what quantities or by whom. Some have said that perhaps 60% of today's oil prices are due to pure speculation.

[wehadrons]

It's not a function of supply and demand because the world's oil producers are pumping their hearts out although they can control supply if they want to. The fact that there is abundant supply points to speculation as the factor that's driving up gas prices.

[wehadrons]

Now it is indeed ironic if not demonic that Wall Street can interject itself in the commodities markets, make millions for hedge funds and speculators while causing widespread pain and starvation in the rest of the world. And it's all perfectly legal! It's Enron's dream become reality.

[wehadrons]

Wall Street produces nothing, sells nothing but paper, but yet can enrich itself at the expense of poor people the world over. By driving up prices on vital necessities, it provides a disservice to humanity while enriching itself. Capitalism has indeed run amok.