I have received several emails and comments that I do not post, blaming environmentalist for not allowing the United States to drill in Alaska. Many people have stated that if we start to drill here in the United States we can be independent and free from the Saudi's.
The TRUTH is that the current OIL commodities, futures market is NOT being driven by supply and demand as IT SHOULD. The surge in the price per barrel of oil is based on PURE SPECULATION. The OIL commodities market was opened to speculators in 1999 I believe. Around the time when George W. Bush took office. Before futures could only be traded between oil companies. The speculators are buying contracts today based on FUTURE (ie; 10 and 20 years out) expections.
The oil companies have estimated the growth rate of oil consumption to increase exponentially due to an an estimated increase in China and India's population within 10 to 20 years. That is why the oil companies KEEP saying that supply levels are low. It's ALL RELATIVE! With that statement being played over and over again, all the OIL COMPANIES have to do is kick back and watch the SPECULATORS invade the market and DRIVE up the price! With that being said, pretend you are an investor and imagine buying a contract today for let's say $150 and hope that your investment increases to $450 down the road. The demand for these contracts is what is DRIVING the price per barrel UP! ERGO, causing OUR price per gallon to skyrocket!
Let's say that we do decide to drill in Alaska, it will take 10 years for us to retrieve the oil and be up and running. The insane idea to drill in Alaska WILL ONLY save us 1 1/2 cents (pennies)!!! Where on this beautiful green earth is that COST EFFICIENT? By that time, 10 years out, our price per gallon is expected to be $15 or more. We, the consumer will NOT be saving. The ONLY people that will benefit from drilling in Alaska will be the OIL COMPANIES, speculators and hedge fund managers!
The same thing is occurring with the mortgage industry when they began selling derivatives (SIVs, CDOs and MBSs) that are tied to mortgage pools to investors around the WORLD. The riskier the loan, the higher the interest rate on the note, ergo the GREATER return for the investor. That bubble has been imploding and it's only the beginning. You feed enough JUNK into the markets... the markets are bound to regurgitate it. The mortgage lenders, speculators and hedge fund managers are to blame for this fiasco. I can't neglect to also place blame on the U.S. Federal Reserve, the Securities Exchange Commission, Sec. Treasury Hank Paulson and our beloved George W. Bush for NOT regulating the real estate, mortgage and investment industry's and allowing this situation caused by corruption, greed and fraud to unravel the way that it has.
The same is true for the commodities market tied to agriculture (ie; rice, corn, wheat, grain, etc.). Speculators and hedge fund managers have driven these prices up as well affecting us all around the WORLD. Yes, I know the extreme weather has hampered crops around the world. Hhmm, I wonder why?
We would NOT be in this global mess had the governments around the WORLD maintained regulations to sustain a TRUE supply and demand market for all of the above. Integrity is the ONLY thing that sustains free markets! When you create these abominable type of investments that are TIED to our daily consumption of basic necessities, you can be sure that it will ricochet and take all of you down in the process as well. You simply can NOT bite off the hand(s) that FEED YOU! If you continue to do so... YOU will ONLY do so at your very own detriment! Reap as you sow...
You can try suffocate a human being because it makes you feel good. But you can be sure that the HUMAN SPIRIT will FIGHT for its very survival and find the strength to overpower you. In the END you become the LOSER and end up with NOTHING!
Greediness is a short lived fix!
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