Tuesday, May 24, 2011

Speculators

Just so you know how it's done and why we're paying way more for gasoline (and products that depend on oil) than we should:

The Commodity Futures Trading Commission alleges the speculators bought enormous amounts of actual crude oil for sale in Cushing, Okla, during the early months of 2008.

This created a perceived shortage of oil in Cushing -- a major point for oil delivery -- and drove the price of oil futures contracts higher.

The speculators then bet the price of oil would fall by selling so-called "short" contracts to other investors. When the speculators sold their actual oil holdings in Cushing en mass, the price of oil did fall, netting the group a hefty profit.


CNN Money Watch

If you don't think stuff like this is not happening on a global scale under "legal" conditions you're a fool. A damn fool.