G8 "strongly concerned" over oil prices (Extra)

TedJul 8th, 2008 - 12:13:51

Saudi Arabia says oil is over priced. Others experts are also are saying the same thing. There is no shortage of oil, just bad management of inventory levels. The oil bubble will burst some day soon. That's what happens to big bubbles. Oil futures have been artificially inflated in value by commodities traders for weeks. Traders like Goldman Sachs and Morgan Stanley are making a fortune. I think new regulations are necessary. I find it interesting that billionaire financier George Soros calls this OIL phenomena a Bubble when everyone else sees a sharp spike in oil prices. He says he believes there are lots of bubbles building in financial markets, and in OIL. To quote him he says 'He believes better regulation is necessary to keep commodity prices at more reasonable levels.' That's what I have also been saying. The government needs to step in and do something about commodities trading. First of all, OIL and Gas should not be traded like poker chips. The consequences of a mistake are far too grave. Look whats happening in Europe now with strikes and protests etc. Imagine if the same thing happened here. To help make my point imagine if we traded wheat commodities and wheat jumped 100 percent so traders all jumped in and bought more driving the cost up even higher... soon the whole world would starve because wheat prices would skyrocket. There are probably controls on wheat trading so this can't really happen but what about oil. Can Investors drive the price up indefinitely? What controls are in place to prevent a huge spike in prices on the NYMEX. Oil is a key commodity and it's basic for the proper operation of commerce in America. For investers to gamble with this commodity in Futures speculation is very irrational and irresponsible. I firmly believe there needs to be safety controls in place to prevent greed driven spikes in prices on the commodities exchange the same as there were safety controls implimented after the great crash of the Thirty's to prevent a bottoming out of stocks. It's a big game to them... but if the rules of the game are flawed then accidents happen. I am refering to the ENRON LOOPHOLE, SWAPS LOOPHOLE, and LONDON LOOPHOLE. A huge spike could take prices through the roof and this would not be good for for anyone except PERHAPS for the speculator involved. The Canadian Government is investigating this as we speak and rightly so. If other governments follow suit then futures traders may be forced to follow new rules of trading. When fear, greed and suspicion surround an activity what does that tell you? The commodities market needs a good overhaul to bring some credibility back into commodities trading. New regulations are necessary because a huge greed driven spike in oil can cause fear among all other investment sectors that are adversely affected by high oil prices. That fear would trigger a market reversal of grand proportions that would far out-weight any gains made by oil. These high prices are not sustainable and jeopardise economic growth globally, The price is inflated far above it's true value which is probably closer to 80 dollars a barrel. Visit our website and take part in our gas poll on. We asked who's to blame for high gas prices and got some very interesting results. Over half of respondence say they blame speculation for the problem. www.nbtv.ca

Report this comment