While the issues that resonate the loudest through the various #OccupyWallStreet protests surround bank bailouts, dirty housing foreclosure tactics and crony relationships with politicians, a new report from the Consumer Federation of America indicates that the price of oil has been artificially driven up (…way up) by Wall Street speculation as well, resulting in a direct pocketbook pinch for everyday Americans. From the report brief which appears in its entirety below:
At the end of 2003 the price of West Texas Intermediate (WTI) crude oil (the “benchmark” for U.S. oil) was about $30/bbl and the value of outstanding futures contracts (called “open interests”) for WTI was less than $20 billion. Wall Street firms like Goldman Sachs and Morgan Stanley and hundreds of hedge funds led the charge into the oil markets, creating products that “financialized” commodities. Index funds and pension funds soon followed. In July of 2008, when WTI hit its peak price above $140/bbl, the average value of open positions was over $150 billion. U.S. oil consumption declined eight percent over that period (global oil consumption was essentially flat). Eight times as much money chasing the same amount of oil is a prescription for price escalation.
3 comments:
Right. It is the bankers who are the problem. They are evil and greedy.
Usury (Jew-ery)is evil and should be renounced. The government can print its own money interest free. Why pay the bankers to print the money?
End the Fed
Maybe we should drill our own oil if only Obama would get out of the way.
4:04, maybe you should actually look up some facts before spouting more BS. US oil production is at record highs. And I guess you also missed where the article states that demand is down. COmmon sense says factors other than supply and demand are at play.
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