$2/Gallon GAS in Less Than 30 Days if Washington Curbed Speculation
That’s right. Despite the lies that you have been told by our government, oil companies, wall street and the media, if our legislature drafted a bill curtailing oil speculation and providing transparency to the industry, we would have $2/gallon gasoline nationally in less than thirty days. This is according to testimony given to the House Committee on Energy & Commerce this week.
Expert testimony states that although there are deep underlying issues to supply and demand, oil should be trading at $65-$75/barrel. It is the self-fulfilling prophesy of financial speculation that has created the current climate of $131/barrel plus pricing.
To add insult to injury, our federal governing body for commodity futures (the CFTC) has been issuing exemptions that ALLOW and ENCOURAGE further speculation. In other words, OUR government’s corporatism is to blame for this acute rise in gas prices, not OPEC, not you.
Read the testimony given to the House Committee Energy & Commerce on 6/23/2008 below and ask yourself, whom do you believe?
Question:
“BOTH SECRETARY PAULSON AND SECRETARY BODMAN HAVE ARGUED SPECULATIONS’ PLAY NO ROLE IN THE RISING OF OIL PRICES. THE CFTC AGREES WITH THEM. WHAT ARE THE COST OF INACTION IF CONGRESS FAILS TO ADDRESS THIS MATTER? WILL IT SELF CORRECT ITSELF?”
Answer:
“THIS IS AN ACUTE PROBLEM. IT CAN BE SOLVED VERY QUICKLY WITH CHANGES IN THE VERY GOOD BRIEF REMARK. — AND THE REGULATORY FRAMEWORK.”
Question:
“MR. MASTERS, YOU INDICATED THIS PROBLEM COULD BE SOLVED RATHER QUICKLY IF WE TOOK STEPS REGARDING THE REGULATORY ON A TRAIN OF SPECULATORS IN THE MARKETS. LET’S SAY THAT CONGRESS PASSED LEGISLATION AND ADOPTED THESE, AND SEND IT, PAST, AND THE PRESIDENT SIGNED. HOW SOON WOULD WE SEE A SIGNIFICANT REDUCTION IN RETAIL GASOLINE PRICES?”
Answer:
“WITHOUT BEING ABLE TO PREDICT THE FUTURE, MY ESTIMATION WOULD BE WITHIN 30 DAYS.”
Question:
“HOW MUCH WOULD THEY BE REDUCED, ROUGHLY?”
Answer:
“I AM NOT SURE I HAVE A CRYSTAL BALL. I WOULD GO BACK TO WHAT I SAID EARLIER. MY SENSE IS THEY WOULD PROBABLY DROP OVER A REASONABLY SHORT PERIOD OF TIME CLOSER TO $65-$75.”
Answer:
“I THINK IT IS REASONABLE TO CONCLUDE THAT IS ABOUT HALF OF WHERE PRICES ARE TODAY. I WOULD THINK THAT GASOLINE PRICES WOULD REFLECT THAT.”
Question:
“YOU’RE SAYING THAT WE COULD ALMOST CUT THE RETAIL PRICE OF GAS IN HALF IN A RELATIVELY SHORT TIME.”
Answer:
“YES.”
Answer:
“TO THE CHAGRIN OF SOME MY COLLEAGUES AT THE COMPANY THAT I EVER QUIT, I TEND TO AGREE WITH MR. MASTERS. I THINK THE AMOUNT OF SPECULATION IS REALLY SUBSTANTIAL. I DO NOT THINK IT WOULD TAKE 30 DAYS AFTER THE PRESIDENT’S SIGNED THE BILL. I THINK IT WOULD HAPPEN MORE QUICKLY THAN THAT. I THINK A LOT OF THE FUNDS WOULD WITHDRAW THEIR POSITIONS AND TRY TO LIQUIDATE IN AN ORDERLY FASHION.”
Answer:
“THE WORLD HAS NOT CHANGED SIGNIFICANTLY OVER THE LAST FIVE YEARS TO JUSTIFY $140. NOW YOU HAVE PEOPLE PREDICTING TWO HUNDRED DOLLAR A BARREL OIL. IF WE DO NOT DO ANYTHING ABOUT IT, THAT PREDICTION WILL COME TRUE.”
Question:
“TELL ME WHAT TOOLS WITH EXISTING STATUTES DO YOU THINK THE CFTC HAS TO AT LEAST GO IN THE RIGHT DIRECTION IN THIS REGARD.”
Answer:
“IF YOU ENFORCE PROVISIONS OF THAT ACT (COMMODITIES EXCHANGE ACT) THROUGH THE CFTC, AND MAYBE THAT WOULD BE THROUGH THE FTC, AFFECTIVELY YOU WOULD GREATLY REDUCE THEIR ABILITY TO ENGAGE IN INDEX SPECULATION. THAT IS CERTAINLY SOMETHING THAT YOU COULD DO RIGHT AWAY. I’M NOT SURE YOU NEED MUCH CONGRESSIONAL ACTION THERE TO ACCOMPLISH THAT.”
Question:
“IS IT TRUE THAT THE CFTC HAS BEEN ISSUING EXEMPTIONS FOR THESE EXCEPTIONS AND HAVE FULL KNOWLEDGE THAT THERE WERE MASSIVE POSITIONS BEING TAKEN IN? THESE?”
Answer.
“THAT IS CORRECT.”
The above transcript was taken directly from the event listed below.
CLICK TO VIEW THE ENTIRE TRANSCRIPT AND WATCH THE TESTIMONY
Oil Price Speculation - House Committee Energy & Commerce
Event Date: 06/23/2008
Length: 6 hours, 35 minutes
Location: Washington, District of Columbia
A hearing was held to examine whether market speculation is inflating the price of crude oil above underlying supply and demand, and whether Congress needs to improve regulatory oversight to stop price manipulation.
The hearing included four witness panels. Energy experts testifying in the first panel said that the price of oil would drop if limits were placed on energy commodity futures investments. Executives from the transportation industry testified in the second panel. Walter Lukken, acting chairman and commissioner of the U.S. Commodity Trading Commission testified in the third panel. The fourth panel consisted of futures exchange representatives.
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