President Obama thinks he knows how to soothe everyone’s pain at the pump. The White House will unveil a $52 million proposal Tuesday at the White House, where he will be joined by Attorney General Eric Holder. According to the Associated Press,
the proposal said it aims to detect and deter illegal manipulation by energy speculators, the type of practices that many Democrats blame for the high cost of gasoline. The officials spoke on the condition of anonymity to discuss the plan ahead of Obama’s announcement.
The President’s $52 million proposal will reportedly “curtail the ability of speculators to take unlawful advantage of oil price volatility.”
The Obama plan will, again, according to the AP,
— Increase six-fold the surveillance and enforcement staff of the Commodity Futures Trading Commission to better deter oil market manipulation.
— Increase spending on technology to provide better oversight and surveillance of energy markets.
— Increase civil and criminal penalties against firms that engage in market manipulation from $1 million to $10 million.
— Give the Commodity Futures Trading Commission authority to increase the amount of money that a trader must put up to back a trading position. The administration officials said such authority could help limit disruptions in energy markets.
And if all that isn’t enough, the President will turn the White House Council of Economic Advisers loose on the CFTC’s data.
Speculators are convenient scapegoats for all governments. In August 1971, President Nixon told the nation that he was “temporarily” closing the gold window. The amount of gold held in Fort Knox as a percentage of outstanding paper dollar claims against it — had declined from 55% to 22% — leaving the Treasury desperately close to default. So the Nixon Treasury either had to quit borrowing and quit printing money, or snip the dollar’s link to gold.
Of course, the conservative Nixon couldn’t admit that his big-spending policies were wrecking the dollar. No, it was those speculators, he claimed.
In the past seven years, there has been an average of one international monetary crisis every year. Now who gains from these crises? Not the workingman; not the investor; not the real producers of wealth. The gainers are the international money speculators. Because they thrive on crises, they help to create them.
In other speculator bashing news today, The Zimbabwe Mail reports that the Zimbabwe government is ordering 109 companies to make new applications for mineral titles.
The order follows the ministry of mines’ decision in January to hike pre-exploration fees for most minerals by as much as 8,000 percent in a move the ministry said was meant to curb the speculative holding of mine titles.
The Ministry of the Mines is requiring companies and individuals to use the titles or lose them, and a number of titles have been surrendered to the Ministry.
Despite the policy, Ministry officials believe there will be a nearly 16% growth in registering titles this year.
“The new mining fees are not meant to discourage indigenous players, rather they seek to do away with the speculative tendencies in the mining sector. Over the past few months, we have seen a number of claims being surrendered to the Ministry following the adoption of the policy as well as the implementation of the Use It or Lose It Policy,” said Dr Obert Mpofu, Mines and Mining Development Minister.
Despite the directive, it’s hard to imagine miners lining up to register for mining titles in Zimbabwe, and, as for Obama’s plan, Zero Hedge is “100% confident that just like every failed attempt at central planning, all Obama will achieve is another spike in crude prices, just in time for the next global reliquification cycle, just in time for 2012′s debt ceiling scandal, and just in time for the reelection.”
Follow Circle Bastiat
Yes, and as soon as they take care of the speculators, they should go after the “anti-speculators” who, everyone knows, have infested the computer industry, sending prices for consumers into a freefall, causing producers like Apple< Intel, Microsoft, etc. to suffer dissappointing profits and inadequate returns over the past 40 years. Arrest them!
When economic policy fails, blame those evil speculators.
While increases in crude prices are supposedly the fault of speculators, no one has given credit to the specs for pushing nat gas prices down to nearly zero.
I wished the title would be The war on politician continues. That would be fine head line. But the other way round, just mean less civil righs and more arbitrariness backed by the force monopoly of the state. Or harsher formulated: A world ruled by parasites.
Reducing the number of traders makes it easier for a few big boys to control the market, either on the buy side or sell side. Government activism could create what they say they want to prevent.
In a similar vein, Tim Geithner appeared on Meet The Press Sunday to promote the administration’s “fairness doctrine”, proposing that a $5B tax increase on the “rich” is the primary tool to correct the $15T defecit, and a cure for the economy.
Not one question or comment was made about the relationship between the debasement of the dollar and the increases in commodity prices, including gasoline.
Speculators are not the problem (they may be part of a problem). The price of gasoline in units of gold, has been quite stable, I understand.
Monetary policy is the problem.
The cravenness of it all. I wonder how the cleaning lady manages to remove all the ooze from the panelled floors…
http://news.antiwar.com/2012/03/04/obama-wont-hesitate-to-use-force-against-iran/
Off-topic, but for fun’s sake, this story was mentioned a bit earlier in the history of the 21st century:
http://news.antiwar.com/2011/03/02/gates-warns-of-loose-talk-about-attacking-libya/
Of course, no-one ever explains how “speculators” actually are actually managing to push the prices hither and yon to their advantage. They seem to have so much more power than the government it’s frightening!
Recently there were discussions about “speculators” and “hedge funds” manipulating the food prices )in particular wheat) leading to no end of sob stories about impoverished people croaking due to absent food. No mention about subsidized biofuels and similar retardations.