www.theoxfordscientist.com
Is Senator Brown and the Obama administration
playing politics with gas prices?
there is substantial evidence that the large amount of speculation in the
oil futures market has significantly increased prices
US Senate Permanent Subcommittee on Investigations
Eric LaMont Gregory
President Omaba and Senator Brown are suggesting solutions that are already a matter of law;
it is the White House and the US Senate that have not pushed for the enactment of the law
to curb speculation in the oil futures market
On the 11th of April, Senator Brown of Ohio, sent a questionnaire to thousands of Ohio voters concerning the recent spike in the price of gas. 'Dear Friends', his introductory statement begins, 'While oil companies are making record profits – the five biggest took home more than $137 billion in profits last year – the rest of us are paying more at the pump'.
'It doesn’t make sense', his statement continues, 'We’re at an eight-year high in domestic oil production, and domestic demand for oil and oil products is down. That means supply is high, demand is low, but we’re still stuck with high prices at the pump. So what do we do?'
Brown then lists several options to reduce the price of gasoline, prefaced with the following question:
'Please tell me which of these actions you support to reduce gas prices:' The first choice offered Ohio voters reads:
'1.
Crack Down on Speculation: Prevent Wall Street speculators from driving up the price at the pump. A recent report found that excessive speculation adds $0.56 to every gallon of gas you put in your car.'
And, this is the most curious part. A law came into effect in January 2011 to do just that. The law brought in to effect, under the Dodd-Frank Wall Street Reform Act, a provision instructing the Commodity Futures Trading Commission (CFTC) to impose position caps on oil traders.
As of today, these limits have not been implemented by the Commodity Futures Trading Commission.
Senator Brown, is suggesting a solution to a problem that in fact already has a remedy enacted into law. It is the Senate, in which he serves, and the Obama Administration that has failed to insist that the provisions of the law to prevent over speculation in the oil futures market be enforced.
If Obama or Senator Brown actually wanted to remove speculation from the oil market, they would contact Gary Gensler head of the Commodity Futures Trading Commission, and relay to him that he, 'needs to obey the law,' and set … limits on the amount of oil any one company can control on the oil futures market', as prescribed by law.
If you, Senator, truly want gas prices to reflect supply and demand as you suggest, and not the activities of traders who simply make profits from speculation, those that drive prices up and sell, then make the call to Gary Gensler of the Commodity Futures Trading Commission.
And, after doing so, please forward to me and the thousands of other Ohio voters you sent this misleading and rather obvious piece of campaign literature to, a copy of your communication to Gensler of the CFTC, and please let us see Gensler's response to you.
Or, will the voters of Ohio have to send the Marine to the US Senate to get the job done.
The facts are these:
The Commodity Futures Modernization Act of 2000 (CFMA) was drafted by the man who today is President Obama’s Treasury Secretary, Tim Geithner. The CFMA, in effect, gave free reign to over-the-counter (between financial institutions) derivatives trading in energy futures, and without any US Government supervision of this
market. The lack of oversight came about as a result of the financially influential lobbying pressure of the Wall Street banks.
Oil and other energy products were exempt under what came to be called the 'Enron Loophole.'
In 2008 at the height of the public outrage against Wall Street banks for causing the financial crisis, Congress
passed a law which required them to overturn a veto by President George W Bush to 'close the Enron Loophole.'
The law brought in to effect, as of January 2011, under the Dodd-Frank Wall Street Reform Act, includes a provision instructing the Commodity Futures Trading Commission (CFTC) to impose position caps on oil traders.
As of today, these limits have not been implemented by the Commodity Futures Trading Commission.
The issue of unbridled and unregulated oil derivatives speculation by a handful of big banks is not new. A US Senate Permanent Subcommittee on Investigations report - 'The Role of Market Speculation in rising oil and gas prices, June 2006,' - noted that, 'there is substantial evidence supporting the conclusion that the large amount
of speculation in the current market has significantly increased prices.'
The Senate's Market Speculation report pointed out that the Commodity Futures Trading Commission had been instructed by the Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation.
The US Commodity Exchange Act (CEA) states, 'Excessive speculation in any commodity under contracts of sale of such commodity for future delivery . . . causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity.'
Further, the Commodity Exchange Act directs the Commodity Futures Trading Commission to establish such trading limits 'as the Commission finds are necessary to diminish, eliminate, or prevent such burden.'
Where is the Commodity Futures Trading Commission (CFTC) now that we need such limits? As Senator Sanders of Vermont correctly noted, the CFTC appears to ignore the law to the benefit of Goldman Sachs and Wall Street friends who dominate the trade in oil futures.
Senator Sanders also stated that the CFTC does not 'have the will' to enact such limits and 'needs to obey the law.' Sanders adds, 'What we need to do is … limit the amount of oil any one company can control on the oil futures market. The function of these speculators is not to use oil but to make profits from speculation, drive prices up and sell.'
While he has made a number of suggestions that he is trying to close the loopholes, Commodity Futures Trading Commisson Chairman, Gary Gensler, has yet to do so. Coincidentally, it should be noted that Gary Gensler is a former executive of Goldman Sachs. And, there has been no enforcement actions taken by the Commodity Futures Trading Commission, that is, enforcement remains non-existent.
Perhaps, since it is generally acknowledged that speculation is driving up gas prices, our two Senators from Ohio might consider seeing that the laws Congress enacts are enforced.
Remembering, that inflation in the price of essential commodities is the cruelest tax of all.
Commodity Futures Trading Commission, Gary Gensler
'It doesn’t make sense', his statement continues, 'We’re at an eight-year high in domestic oil production, and domestic demand for oil and oil products is down. That means supply is high, demand is low, but we’re still stuck with high prices at the pump. So what do we do?'
Brown then lists several options to reduce the price of gasoline, prefaced with the following question:
'Please tell me which of these actions you support to reduce gas prices:' The first choice offered Ohio voters reads:
'1.
Crack Down on Speculation: Prevent Wall Street speculators from driving up the price at the pump. A recent report found that excessive speculation adds $0.56 to every gallon of gas you put in your car.'
And, this is the most curious part. A law came into effect in January 2011 to do just that. The law brought in to effect, under the Dodd-Frank Wall Street Reform Act, a provision instructing the Commodity Futures Trading Commission (CFTC) to impose position caps on oil traders.
As of today, these limits have not been implemented by the Commodity Futures Trading Commission.
Senator Brown, is suggesting a solution to a problem that in fact already has a remedy enacted into law. It is the Senate, in which he serves, and the Obama Administration that has failed to insist that the provisions of the law to prevent over speculation in the oil futures market be enforced.
If Obama or Senator Brown actually wanted to remove speculation from the oil market, they would contact Gary Gensler head of the Commodity Futures Trading Commission, and relay to him that he, 'needs to obey the law,' and set … limits on the amount of oil any one company can control on the oil futures market', as prescribed by law.
If you, Senator, truly want gas prices to reflect supply and demand as you suggest, and not the activities of traders who simply make profits from speculation, those that drive prices up and sell, then make the call to Gary Gensler of the Commodity Futures Trading Commission.
And, after doing so, please forward to me and the thousands of other Ohio voters you sent this misleading and rather obvious piece of campaign literature to, a copy of your communication to Gensler of the CFTC, and please let us see Gensler's response to you.
Or, will the voters of Ohio have to send the Marine to the US Senate to get the job done.
The facts are these:
The Commodity Futures Modernization Act of 2000 (CFMA) was drafted by the man who today is President Obama’s Treasury Secretary, Tim Geithner. The CFMA, in effect, gave free reign to over-the-counter (between financial institutions) derivatives trading in energy futures, and without any US Government supervision of this
market. The lack of oversight came about as a result of the financially influential lobbying pressure of the Wall Street banks.
Oil and other energy products were exempt under what came to be called the 'Enron Loophole.'
In 2008 at the height of the public outrage against Wall Street banks for causing the financial crisis, Congress
passed a law which required them to overturn a veto by President George W Bush to 'close the Enron Loophole.'
The law brought in to effect, as of January 2011, under the Dodd-Frank Wall Street Reform Act, includes a provision instructing the Commodity Futures Trading Commission (CFTC) to impose position caps on oil traders.
As of today, these limits have not been implemented by the Commodity Futures Trading Commission.
The issue of unbridled and unregulated oil derivatives speculation by a handful of big banks is not new. A US Senate Permanent Subcommittee on Investigations report - 'The Role of Market Speculation in rising oil and gas prices, June 2006,' - noted that, 'there is substantial evidence supporting the conclusion that the large amount
of speculation in the current market has significantly increased prices.'
The Senate's Market Speculation report pointed out that the Commodity Futures Trading Commission had been instructed by the Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation.
The US Commodity Exchange Act (CEA) states, 'Excessive speculation in any commodity under contracts of sale of such commodity for future delivery . . . causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity.'
Further, the Commodity Exchange Act directs the Commodity Futures Trading Commission to establish such trading limits 'as the Commission finds are necessary to diminish, eliminate, or prevent such burden.'
Where is the Commodity Futures Trading Commission (CFTC) now that we need such limits? As Senator Sanders of Vermont correctly noted, the CFTC appears to ignore the law to the benefit of Goldman Sachs and Wall Street friends who dominate the trade in oil futures.
Senator Sanders also stated that the CFTC does not 'have the will' to enact such limits and 'needs to obey the law.' Sanders adds, 'What we need to do is … limit the amount of oil any one company can control on the oil futures market. The function of these speculators is not to use oil but to make profits from speculation, drive prices up and sell.'
While he has made a number of suggestions that he is trying to close the loopholes, Commodity Futures Trading Commisson Chairman, Gary Gensler, has yet to do so. Coincidentally, it should be noted that Gary Gensler is a former executive of Goldman Sachs. And, there has been no enforcement actions taken by the Commodity Futures Trading Commission, that is, enforcement remains non-existent.
Perhaps, since it is generally acknowledged that speculation is driving up gas prices, our two Senators from Ohio might consider seeing that the laws Congress enacts are enforced.
Remembering, that inflation in the price of essential commodities is the cruelest tax of all.
Commodity Futures Trading Commission, Gary Gensler
State Senator Bob Peterson, Sate School Board Member Jeff Hardin, and Eric LaMont Gregory
at the Ross County Lincoln Day Dinner 2012
at the Ross County Lincoln Day Dinner 2012
