Quote:
Originally Posted by AB_Monterey
What happens with oil prices actually has very little to do with actual supply and demand. Since 2000 when Clinton signed the Commodity Futures Modernization Act (Gramm and Luger sponsored), the market has been driven by speculation. Prior to 2000, commodity trading was regulated.
After passage of the bill, traders had an officially deregulated market for energy futures. Worse, that bill also deregulated many financial instruments – including the collateralized debt obligations that are at the center of today’s mortgage crisis.
Here's a great summary:
http://www.engdahl.oilgeopolitics.ne...peculation.HTM |
AB_M. I agree with you totally and I believe this is the single biggest event that has screwed us. Before the Commodities Modernization Act of 2000 Every energy trade over $10,000 was regulated on the NYSE and fixed by a "supply and demand" price. This was to prevent speculation and wild price swings on a energy. This bill allowed the trades to first go over the counter and then in 2002 trading moved overseas with no regulation. When is the first time a storm effected the price of oil? 2002! England has made a few attempts to gain support and concensious of trying to regulate energy prices but has failed.
There was no speculation on oil before 2000 as the price was "fixed".
The crisis in the 70'ies was different. I was living in Iran as a high school student and I remember in 1971 my father being in an argument with an Iranian general about how Nixon just sold the US out. He predicted a doubling of oil prices. My father's argument was position was that could not happen because we had a check's and balance with 3 bodies of government (Legislative, Judicial, and executive). This was the first time I had ever seen my father get that upset so it did leave a big impression on me. We moved back to the US in 1973 and watched the preditions of the Iranian general come true. I can't tell you how much this impacted my father as his faith in the government was shaken.
Oh yes, I did see President Nixon and the Shah and I got one of his famous Peace Sign waves I called out "I'm and Amarican".