/ Category: I am writing this from my office away from my office, downtown Sarasota, Fl. Many times I have to get out of the office to get my mind straight and think. As I was thinking about this recession we are in I asked myself what has really caused this. I think there has been many reasons from a Rip Van Winkle fed chairman (not that I think Greenspan was any better) to a greedy real estate market and to put the cherry on the cake the unregulated oil commodity market. That brings me to my next question. How did we get back in this oil crisis? I do know that it has affected everyone we know from those who travel and now have to pay for luggage, to those who depend on transportation and finally those who are retired and are dependent on retirement income from the stock and bond markets. I am not going to complain about the situation because all that does is boil the blood. I am however going to tell you about part of the problem with our oil crises. Oil prices respond to normal market forces such as supply and demand. Oil does however respond to other pressures that many not in the financial services know about. That would be oil contracts. Twenty years ago only twenty one (21%) percent of the oil contracts were purchased by speculators who trade oil on paper, who by the way never plan on or intend to take the oil as a delivery. Here we are today, now 66% (Sixty Six Percent) of oil is contracts are traded by speculators. Let me restate that SIXTY SIX PERCENT.� Oil speculators buy large amounts of oil and then they trade it back and forth between themselves, again with no intention of taking delivery. That means in simple terms a single barrel of oil may be traded 10 � 15 or even 20 times before it even gets used.� We as the consumers get to pay the end price while the oil speculators are cashing in on our despair.� In reviewing the oil experts they are estimating that between $20.00 to $60.00 per barrel is added on to the price to account for this increased profit for the traders. Our government seems to be doing nothing about it. Over seventy years ago there were regulations put into place to stop this but over time as politicians needed favors these regulations have been attached to other bills to continually weaken the oversight our government has on this activity.
What do you think about this? Do you think it is the government�s responsibility to curtail this activity or do you think it is free market activity?
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Do you think that our presidential candidates should be talking about this more or do you think their line of current thinking is on track, such as conservation and more trade rules with oil importers?
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PS. If you really want to complain contact your congressman and you can also go to
http://www.stopoilspeculationnow.com
Tags: Retirement, Retirement Income
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