The Story:
By Barbara Lewis
LONDON (Reuters)
Speaking about the increasing price of oil:QUOTE: ……Investors have been drawn in by a weak U.S. currency, which has made dollar-denominated commodities relatively cheap for holders of other currencies.
Speaking to Reuters during a visit to Venezuela, OPEC Secretary General Abdullah al-Badri said the soft dollar was one of the factors that could keep pushing oil higher.
Tanker tracker Petrologistics said on Wednesday OPEC’s oil output in May had risen by 700,000 barrels per day (bpd) compared with April.
Extra OPEC crude has had little impact as the market has instead focused on short-term refinery problems, which are symptomatic of chronic underinvestment.
The Comments
It is clear from these reports that prices have NOT been established by supply and demand. Wealthy investors are using commodities as hedges against the devaluating US dollar. You can’t read that in the major media because they defend the system. They defend the system, because it is a system developed by and promoted by large corporations. In fact any questioning of the system is considered blasphemy, which is punished and that has quieted a lot of intelligent and knowledgeable people.
There has not been an increase in fuel consumption by 12% this year, nor has there been a 12% decrease in supply, so what justifies a 12% increase in the price? The Answer: nothing! The markets are not free, they are distorted significantly by speculators who know that the consumer has few if any alternatives. With the consumer up against the proverbial wall, speculators have driven the price up regardless of supply and demand ratios.
Oil supplies have increased and consumption is at its lowest in the year, yet prices have increased dramatically. Price increases are justified by paper thin excuses over fears of supply problems. Even when those fears never materialize, the prices continues to increase and the medias continues to defend the system and its abuses. They assert that the problem is OPEC, which keeps people from pointing their finger at the real problems and demanding the government does something about them.
Governments have not protected the consumer from the abuses of the system. They have failed not because they didn’t know what was happening. The housing crisis was a disaster waiting to happen and the government did nothing. It has effectively transfered the wealth of millions of citizens to the wealthy, turning the country into a labor camp.
If the markets were truly free, then they would reflect the actual price a consumer was willing to pay for a product. The fact that this week 84% of Americans had concerns about the economy and high energy prices, indicates that the market does not reflect the consumer’s willingness to pay the price the market is dictating. Furthermore, it is not just the US which is bidding for world oil. Countries with far weaker currencies should effectively lower prices if it was market driven. The markets are far from free. They are being manipulated by speculators who are holding the entire world hostage and extorting from them their life blood.
The idea that markets can operate freely is idealism in this present world. General Motors has more revenue than the majority of countries in the world. When there are corporations with the financial capacity to dominate markets there is no hope of truly free markets. The consumer becomes the victim of extortion. In the case of food, people go hungry, become weak and sick, and even die in third world countries, because of market speculators and the irrational defense of the myth of free markets. There is something wrong with a system that can destroy lives and kill people in the name of profit?
Paul Weigel
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