Guess why you were paying $4 for gas.
Quick answer? Greed.
The sudden crash in oil prices might be the smoking gun that shows speculation, rather than supply and demand, drove the huge run-up in oil futures last year.
Daniel Fine of the New Mexico Institute of Mining and Technology’s Center for Energy Policy told participants at a forum in Albuquerque Jan. 16 that massive, speculative trading by investment banks like Lehman Brothers, hedge funds and others is what drove oil above $140 per barrel.
It created a “colossal energy price bubble,” said Fine, a former MIT research associate and contributing editor on natural resources for BusinessWeek.
“Like real estate, the energy bubble was based on excessive, open credit that allowed big investment firms to instantly arrange contracts without putting anything up,” Fine said. “No deposit or letter of credit was needed.”
After Lehman Brothers folded in September, investigators found it held 10,000 oil contracts of 1,000 barrels each, Fine said.
Once speculative borrowing ended, oil prices plummeted to below $35 per barrel, which Fine said can’t be explained by supply and demand.
“At this point, total world demand for crude has fallen just two percent,” Fine said. “U.S. demand since the peak is down less than five percent. I say it’s not supply or demand, it’s fall out of speculation and the relative absence of credit from the financial services industry.”
At this point, the sanest economic policy we can enact is to weld the doors of Wall Street shut, and toss a few cluster bombs through the windows. If our economic system is so far divorced from the free market that the normal actions of supply and demand no longer function- hell, are no longer even considered, then the system is terminally ill, and should be scrapped. The other night Jon Stewart tossed out the idea that instead of funneling bailout money to the exact group of greedhog a-holes who made the problem in the first place, why not give it to the people who need it-you know, us? Now, the total amount of consumer debt in this country, not counting mortgages, is around 3 trillion dollars.
And while doing that, you enact meaningful regulation of the stock market and banks, restore the Glass-Seagal Act, abolish any legislation that Phil Gramm had his piggy mitts on, and end the Federal Reserve, for starters. Once ordinary Americans have cash back in their wallets, they’ll spend it. And it won’t be on $1200 fucking trash cans or hiring off-shore workers to replace costly American jobs. It will be on houses, cars, big ass TVs (for cash this time), putting people back to work in every sector of the economy, except of course for the financial industry, which should revert back to being mom and pop small banks handling Christmas Stocking accounts and graduation savings bonds.
Then, once the money starts flowing again, just to add to the glee, every night on Fox we execute the assholes who ruined the American economy for their personal gain, starting with that sicking Jabba the Hut stand-in from Exxon:
Once the oil stops seeping from his bullet-riddled torso, find the first guy who off-shored his company to some third world country and retired large on the increased profits, and have a bunch of unemployed steel workers or assembly line grunts take him to Fight Club in the basement of some Akron bar.
Then, for the final sanity check, free the weed. Mexico is about to implode due to the brutality of the drug cartels- who are only in power because they sell an illegal product. A product that is illegal only because the United States deems it so. If the United States were to decriminalize pot, sell it at your local package store, Juan and his criminal cohorts would have to find another way of making a living, because contrary to the Reefer Madness mentality of our government and those who’s livelihoods are due to insipid drug laws (police, educators, researchers and “scared straight” programs), the majority of pot smokers don’t use it as a gateway drug to anything. We don’t wanna snort coke, inject smack, or smoke crack. Just let us buy herb at the same place we buy wine, slap your outrageous taxes on it, free the brothers in jail for a plant, and really, all will be well. You’ll have a more prosperous and calmer nation.
Your alternative? Keep paying our money to the robber barons who stole it from us the first time, and you’re gonna have a bunch of people melting down and snorting Sudifed, sitting in darkened, foreclosed houses with shotguns, trying to exist. Take your pick.