Community | July 29, 2009 | 15 comments

CFTC: Speculators caused 2008 oil price crisis

source: http://rawstory.com/08/news/2009/07/28/cftc-speculators-caused-2008-oil-price-crisis/

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bansheewail
In a major U-turn from its claims during the Bush administration, the Commodity Futures Trading Commission is now set to admit that speculation in oil markets — and not the forces of supply and demand — are behind last year’s massive oil price spike.

In the summer of 2008, oil prices on the open market reached an unprecedented $147 per barrel. Many economists argue the spike helped push the US into an economic free-fall last autumn.

At the time, the CFTC — which is tasked with regulating commodity and financial futures — said that the huge price spike was a result of supply and demand. That explanation was met with ridicule from many market-watchers, who said it was impossible that demand for oil increased by such a huge margin even as the North American, European and Japanese economies were slowing down.

Now, according to a scoop in the Wall Street Journal, the CFTC is about to reverse its Bush-era position, and admit that market speculators — investors who bought oil futures on the expectation they would rise in value — “played a significant role” in the oil spike.

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15 comments // CFTC: Speculators caused 2008 oil price crisis

  • Kepano
    • 0
      Kepano  

    • Big Business got the profits. The American Government Allowed it just like the 32 Billion Dollar Bonuses paid out at Taxpayers’ expense. Stupid Fucking American Government.

    • 2 years ago
  • cego
    • 0
      cego  

    • Is it just me or is having an economic class that manipulates markets causing hardships for the lower classes a bad thing?

    • 2 years ago
  • wally60
    • 0
      wally60  

    • goldman sachs owns and operates our goverment.
      there are so many former employes working in the goverment.it all comes down to any way to make a
      dollar doesnt matter if they wipe out america.
      they will make a buck on that to.

    • 2 years ago
  • VoyagerFilms
    • 0
      VoyagerFilms  

    • Yet another reason why Bush and company should be prosecuted. They corrupted or allowed to be corrupted virtually every aspect of our government, OUR government for personal gain and that of their evil friends.

      I - we spoke of the false reporting on this issue and the REAL cause right her on Current last year while it was happening. I recall Dianne Feinstein at a news conference where she said she was looking into it.

      Disgusting what the Bush Admin. has down to America - and all those that were pushing and supporting the Bush admin. Treason!

      Think of all the home owners now in turmoil as a result of the high costs of fuel, the resultant effects on America. It's nothing short of TREASON and disgusting.

      These same people have no loyalty to the United States of America, in fact many that were behind all the horrible things that have occurred to us during the Bush admin. are now fighting President Barack Obama.

    • 2 years ago
  • Conniepae
    • 0
      Conniepae  

    • So, the truth is coming to light. What about the testimony under oath? Did the oil companies lie, under oath? Companies started really struggling under the pressure of gas prices in '08, shouldn't someone be held accountable? Have policies been put in place to stop this from happening again?

      Someone should be held accountable!

    • 2 years ago
  • bluestranger
  • stopnoise
    • 0
      stopnoise  

    • It is the nature of this type of business they call "free market." Whatever you find speculators you will have inflation and money stolen from the public somehow.

    • 2 years ago
  • pjacobs51
  • masterzip
  • neocongo
    • 0
      neocongo  

    • Of course the CFTC wouldn't admit this during the Bush era. It was the Bush administration that de-regulated the CFTC and allowed speculation to drive up oil prices.

    • 2 years ago
  • GodsnLiberals
    • 0
      GodsnLiberals  
    • neocongo:

      who has more to gain in an economic freefall last 2008..yet another specuatlion that obama WILL fix all our problems..the bigger than life selling point..

      well did he deliver?? the liberal elite need to find out how they will stop this big ball of shit they created

    • 2 years ago
  • royulery
    • 0
      royulery  

    • nah. it was never the gas price rising, it was the dollar losing value. the smoke screen is to keep confidence in the dollar because public confidence is the only value the dollar has.

    • 2 years ago
  • guidedtotarget
    • 0
      guidedtotarget  
    • royulery:

      Good one! I'd like to see those two charted together. Probably pretty close inverse relationship. There was definitely speculation going on though. It provided an effect just the opposite of the classic idea that speculators take the risk and therefore smooth out the movement in price.

    • 2 years ago
  • bailey78
    • 0
      bailey78  

    • Well we now know who screwed us over . Now what can we do to prevent it from happening again? It's also nice to know that our Goverment can and will sell us to the hightest bidder.

    • 2 years ago
  • bansheewail
    • 0
      bansheewail  
    • Image

    • Here's agreat article from Rolling Stone that explains Goldman Sachs' role in MOST if not all of our recent economic downturns. Banking regulation and reform are essential to our well-being as a Nation. Too big to fail, is too big.

    • 2 years ago
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