America's Petro-Terrorists: How Speculators Drove Up Oil Prices (3,721 words)

[Newsjock]

http://www.sfweekly.com/content/printVersion/3128904/

... In four short years, the price of oil had risen nearly 400 percent. For this to be a natural occurrence, it would have required a sudden, massive increase in world oil consumption — coupled with equally massive shortages in production. None of which had happened.

... It happened on the night of Dec. 15, 2000. The country was in tumult over the Bush-Gore election. This diversion offered Republican Sen. Phil Gramm of Texas an exquisite opportunity to push American financial stability back 100 years.

That evening, Gramm inserted a 262-page amendment into the Commodities Futures Modernization Act. Leaked e-mails would later reveal that it had been written by lobbyists for Enron, Goldman Sachs, and the Koch brothers, Kansas billionaires who would later fund the Tea Party movement.

Gramm had turned his office into a subsidiary of Wall Street. From 1997 to 2002, the securities and banking industries had showered him with $640,000 in campaign contributions. His biggest sugar daddies weren't from Texas; they were Credit Suisse, Morgan Stanley, Bank of America, and Goldman. And he was more than willing to step-and-fetch-it on their behalf.

[russspeakeasy]

1. Hopefully, this won't come as a shock to DU'ers,

but this country, it's resources and politicians are all for sale.
Sometimes at a deep discount. Selling out your country should require some punishment, instead of celebrity.
Happy 4th ..

[Gin]

2. Hmmm....this part explains a lot about no investigations

Let alone convictions....


The appointment of Attorney General Eric Holder said it all. He'd been a partner at the law firm of Covington & Burling, whose clients included Goldman, JP Morgan, Citigroup, and Bank of America. The year before he joined the Obama administration, he made $2.5 million through fees from the very people he was supposed to prosecute.

[OnyxCollie]

3. K&R. nt

[Sirveri]

4. This can only work when supplies are tight.

Oil supplies will always be tight in the modern age however, so that's a moot point.

However watching the month to month consumption/production rates at the time (as I was very interested in peak oil) I saw the 2008 spike show up as consumption exceeded demand by a very small amount, causing the price to spike until demand was destroyed since no further supply could be expanded, even the Saudi's were tapping their reserves to dump into the markets. And why not, 200$/bbl when you get it out of the ground for 50 cents. Pure profit.

But, when supply and demand is tight, then it doesn't take much money to buy up the slack, that where the speculative bubbles come from, and when I was talking about demand, that's considered demand. What was funny was the price drop afterwards that shuttered expansion projects, guaranteeing we will see this again and again.