Speculators are controlling the Oil Markets? Duh! If it wasn’t the infamous OPEC…it was the infamous Chinese, India, Russia or Venezuela! Maybe it was just Saddam Hussein that ran that cheap crude out through those underground pipes to Iran to France, Germany and the rest of Europe at $14 dollars a barrel…….that twisted the market. But how long has Saddam been gone now? What about that cheap Russian Oil during the halcyon Lukoil years? Gone!
Sure, that was before that huge spike in growth by China, India and the rest of the Asian Tigers! Demand had to go up….didn’t it? Well, the Al Gore Inconvenient days of environmental overload seem to be falling on hard times recently. Due to the huge global financial meltdown, growth and increased pollution has momentarily become abated. Now that doesn’t mean that increased vehicle mileage and progressive pollution regulations are now going to become unnecessary. No, but to what degree and for how long?
Cap and Trade Legislation seems to be buffering against a prevailing tide of concern that Global Inflation may be the tangible results…rather than a serious reduction in pollution or increasing technical efficiencies that make sense. Cap and Trade causes the prices of all energy products to skyrocket, being directly passed on to the consumer. Add to that, serious speculation by Hedge Fund and Derivative Traders, ETF’s and Oil Producers themselves in Crude Oil…..and we are talking about a nasty inflation cocktail that will stunt financial growth around the country and the world.
Right now, Airlines are offering some special price war deals to get people back into the “traveling mode”. These good deals however are not going to last long should Cap and Trade Legislation pass or if Crude Oil is allowed to jump passed the recent highs of $72 bucks. The recent news in the Financial Times and the Wall Street Journal seems to suggest that the price of Crude has been manipulated! Duh! It is so bad that new regulations are on the horizon for Limited Aspect Commodities! Does this sound like a euphemism for “Price and Wage Controls”? We will have to see how deep this course of events moves in the immediate future.
How do Credit Cards fit into all this mess? Didn’t the Congress recently pass some great Legislation to protect Consumers? Didn’t they even create a new Consumer Protection Agency….so people could report serious baloney that the Credit Card companies try to put over on the hapless consumer? They have already adopted new tricks to get even after the new legislation. Now, they take balance transfer and cash advances and raise the minimum monthly payment due. Before, you might pay a 2% minimum per month and now they want 3.99%..virtually doubling what they want you to pay a month, even after your original agreement was for a 2% minimum payment.
Or try this one: Credit Card companies can arbitrarily change the rate you pay for purchases….as long as they notify you. Say you have current APR at 7.9% and they send you a notice that says in three months that will change to 13.9%. You have the ability to “opt out”…stop using your Credit Card and paying off your balance at the old rate…..or everything new you buy will be under the new rate. You can transfer your balance to another card at a lower rate…..you pay everything off and shred your card. Do not shred people…. that affects your total available Credit…which affects your Credit Score.
Does all of this Credit Card stuff….sound like Cap and Trade yet? Well, it is actually worse. Banks are busy, lowering your Available Credit lines, busy raising the rate of minimum payments, busy raising every interest rate for almost everything. The good news is…..that those Credit Card speculators buying Crude Oil in the Market….are probably going to stop doing that for a while. But, there are still lots of people with big lines of Credit and lots of cash on hand…..that continue to be attracted to Crude Oil. All to the great determent of Consumers of Energy throughout the world. Add Cap and Trade to this volatile mix and we are starting to talk about some serious possible ramifications.
Is this subject too deep? Not really. What is deep is that the Banks, who are busy supplying speculators with available cash….and restructioning the rest of us….in order to maintain control in the markets. Crude Oil needs to sell for a stabilized $42 dollars a barrel to effect an economic recovering and keep a lid on energy pricing. It is selling today for about $60 dollars. The higher the price of crude oil…..the lower the chances that anyone is going to buy off on Cap and Trade Legislation!
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