No doubt about the pawns in this international game of chess. The general public, the six pack majority, the middle class, the poor, come to think of it about anyone without a major financial interest in oil fits the Webster’s definition of a pawn; “a person used to advance another’s purposes.”
So if most of us are pawns who are the kings? Think about it. If you believe Congress, the news media (at least the broadcast news media), the administration and the analysts you can pick between the major international oil companies, oil producers, China, or the gas guzzling Americans. There is no agreement and it is almost as if there is no thought about it.
The oil companies and oil producers are making record shattering profits. Are they the only ones benefiting from the astronomical profits being made in the oil industry? Hardly! No the river of greed flows in many directions including the financial houses underwriting the oil business and managing their money who also provide the depressing analysis that seems to drive the price up every day.
So why aren’t the network news people or our elected representatives in our nation’s capitol asking questions about it? Americans have reduced their use of oil. The inventories in America are the highest in years. Future demand is certain to go down with the 40% increase in hybrid cars and reduced driving. Weather has been warmer than normal thus reducing heating oil demand. Every economic indicator says the price should be dropping, not rising to record highs.
Where are the outraged congressmen, senators, presidential candidates, governors and media, the so-called protectors of the people? Are they for real? Or are they simply in the pocket of the kings of the oil profits, the oil barons of the 21st century? Well the campaign contributions seem to indicate they have been bought off. So do the millions of dollars being spent on advertising by oil related industries.
The price of oil is set by two things primarily, the policies of OPEC, the Organization of Producing Countries, and the oil futures markets of which one of the largest is the London futures exchange. Saudi Arabia controls OPEC and Saudi Arabia has just said it will do nothing to reduce the price of oil. Thank you and goodbye.
Of course Saudi Arabia is one of the prime beneficiaries of the war in Iraq financed by the USA at a cost to date of about $500 billion, yes 500 billion dollars according to the Congressional Budget Office. The same Al-Qaeda terrorists after us hate the Saudis even though Osama Bin Laden is from Saudi Arabia. He says the Saudi kings sold out to us. More likely they sold out to the oil and finance companies.
Then there are the oil futures markets. The International Petroleum Exchange of London was one of the largest in the world but in 2001 a company that had been formed just a year earlier, a company called InterContinental Exchange (ICE), purchased it. How could one of the largest futures exchanges in the world be taken over by a relatively unknown company?
The company was taken over by 13 equity investors when it began and the gang of 13 has made ICE into one of the most profitable operations in the world buying and selling oil and other commodity futures. Who were the 13? Three of the largest oil companies in the world – Royal Dutch Shell, BP Amoco and Total Fina Elf, two of the top investment banks on Wall Street – Goldman Sachs and Morgan Stanley, two of Europe’s leading financial institutions – Deutsche Bank and Socit Generale, and six US energy companies – American Electric Power, Aquila Energy, Duke Energy, El Paso Energy, Reliant Energy and Mirant. Now ICE claims over 300 companies are equity owners.
ICE is doing what it is intended to do, making a lot of people and companies very, very rich and ICE has no responsibility for what happens to the pawns at the other end of the energy network. No one should be denied the right to make profits, even outrageous profits, as long as they were made using fair business practices.
So what about the investment banks and financial institutions owning part of ICE? Could that cause any problem? It depends on whether these institutions use their own analysts to try and manipulate the oil futures market and elevate the price of crude oil. When an analyst specializing in oil goes on TV and says the weather or war or the unstable economy in America is driving up the price of oil and we should brace ourselves for $4 a gallon gasoline, the oil price goes up.
If that analyst is from one of the many investment banks or financial institutions owning equity in ICE, and their analysis sends the oil price in an upward spiral, then one wonders if a conflict of interest may be present. What is Congress or the FTC or SEC doing to check on the potential for conflicts of interest between oil producers, financial institutions and the futures market? Does anyone even care?
New Goldman Sachs Headquarters NYC
Well hopefully when the presidential candidates are accepting the millions of campaign dollars from these industries they are not making promises to continue to ignore what is devastating to the Pawns across America and the world.