DO SOMETHING!!! (Gov Considers Regulating Futures Markets)

by Ben Hoffman

WASHINGTON — With consumers hit by oil price swings, federal regulators may be moving toward imposing limits on speculative energy trading, which some blame for price volatility.

The head of the U.S. agency weighing new curbs on Tuesday faulted “excessive” speculation but also underscored the role of financial investors in helping set fair prices that can benefit consumers.

As the WSJ reports this morning, the Commodity Futures Trading Commission is now admitting that oil speculators “played a significant role” in a sudden spike in the price of oil in the summer of 2008. That summer oil reached $147 per barrel, and the CFTC claimed the price increase was due to the forces of supply and demand. In an interview with the WSJ, Bart Chilton, one of the agency’s four commissioners, said that analysis was based on “deeply flawed data.”

Gary Gensler, chairman of the CFTC, said his agency must “seriously consider” imposing stringent limits on speculative trading of energy futures contracts, a move that would mark a major shift for the government.

We’ve known for quite a while that speculators drove up the price of oil and food. Goldman Sachs is one of the main culprits. So why is the government just now “considering” taking action. Here’s a good article about the Great American Bubble Machine by Matt Taibbi, published in, of all places, Rolling Stone magazine.

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