Oil Price Speculation - Who do you believe?

For the past two years the Coltons Point Times has been investigating and raising the alarm about the federal rules changes that allowed oil futures to exist and then to be less regulated, that allowed electronic futures purchases from the futures exchanges, and that allowed electronic foreign purchasing of futures on American commodities markets.

We pointed out the failure of the Commodities Futures Trading Commission (CFTC) to monitor and regulate the futures industry and the need to commit federal resources to investigating links between investment houses losing billions in sub prime mortgage markets and the same houses using alternative investment techniques to manipulate the multi-trillion dollar institutional funds and drive up the commodity prices.

In spite of denials from the financial analysts, government, Treasury and oil industry that such practices were being used, the CFTC finally launched an investigation in late May and on August 21 The Washington Post published an article saying evidence of widespread speculation possibly involving over 80% of the contracts sold on the New York Mercantile Exchange have been discovered in the preliminary investigation.

Of course the CFTC and Wall Street are saying The Washington Post is wrong but Wall Street has tried to cover up every scandal by the financial Dark Angels of Wall Street that stole blood money from American and world citizens including the schemes since 2000 resulting in about $35 billion in fines. As for the CTFC, if they were doing their job we wouldn't be in this mess in the first place. But I love it, who do you want to believe, Wall Street and the CTFC or The Washington Post?

The same giant investment houses responsible for the sub prime disaster manage your money, the institutional funds of America. These are the mutual funds that target persion funds, endowments, and other high net worth entities and individuals. Institutional funds usually have lower operating costs and higher minimum investments than retail funds. Often their main objective is to reduce risk, so they invest in hundreds of different securities, which makes them among the most diversified funds available. They also do not tend to trade securities very often, so they are able to keep operating costs to a minimum. Although in the past investors typically needed at least $1 million in order to invest in an institutional fund, nowadays some discount brokers offer access to these funds for smaller amounts. (Definition from InvestorWords.com.)

A capital pool of up to $35 trillion to $70 trillion may be in these institutional funds. Now this includes your retirement, insurance, IRA, 401K, and even investments if you have deep pockets. Since you may be like me and have trouble grasping the size of a trillion dollars, let alone 70 trillion, just remember that the total size of the dreaded US National Debt is $9.6 trillion, meaning the institutional funds are a heck of a lot bigger than the total national debt.

This morning Becky Quick of CNBC, a young up and coming reporter and favorite of billionaire Warren Buffett did a three hour interview with Warren that should be required viewing for everyone in America and on Wall Street. This Midwestern born financial reporter was excellent while Buffett, in his typical low key Nebraska style offered wisdom so powerful that the stock market went up over 100 points and the oil prices dropped over $2 just during the time of his interview.

Stay tuned. As Warren Buffet, our favorite financial guru known as the Oracle of Omaha and the richest man in the world says, "You only find out whose been swimming naked when the tide goes out. Well we found out that Wall Street has been kind of a nudist beach. There has been one discovery after another of firms that either didn't know what they were doing or did things they shouldn't have knowingly."

What a Waste of Energy - America's Energy Policy

Its Time for "North America for Americans"



Hey guys, take a minute to catch your breath and look around. Well, that might be a lot to expect as I've been in campaigns before and I know how hard it is for a candidate to find advisors who actually listen to the public rather than try to tell the public what to think. This campaign seems to have more than its fair share of experts who continue to miss the point and miss the opportunity to show us how their candidate is prepared to lead.

If the candidates want to be responsible then act responsible. If the candidates want to be taken seriously on energy, then act like you know what you are talking about. And if the candidates want to save America then be gentlemen and work together to save us. Otherwise, get out of the way and shut up!

Our first and only concern should be energy independence from foreign control and manipulation. There must be an American strategy that includes our neighbors to the north and south, Canada and Mexico. Between the three (USA, Canada and Mexico) we have more than enough reserves of oil, natural gas and alternative energy capacity to meet our needs forever.

Between the three we have the technical skills, exploration capacity, financial resources and the spirit of freedom needed to create our own cartel to meet our future needs, to control inflation which is now driven by oil prices, to offset problems in one area (hurricanes) with increased production in another area (Canadian shale reserves), and to finally gain independence from foreign manipulation.

There should be no more Dubai's financed with the blood money from American consumers. In the future the horrendous transfer of wealth from the Americas to Arab nations and hostile energy producing nations for oil should stay at home. Instead of $15,000 hotel rooms in the desert, we can give away health care to our citizens. Instead of pro golf courses in camel country how about a good education for everyone here.

If the United States, Mexico and Canada decided our shared interests were far more important than our differences, that our heritages are bound together through generations, that our borders touch and that if the citizens of all three countries had good homes, good health and good jobs, there would be no need for illegal immigration, then we could all live in peace and harmony.

Well the money we wasted buying inflated oil could have accomplished just that and isn't it about time we used that money to do some good for the Americas? Stop pointing fingers and building walls and work together. Mexico and Canada have incredible oil reserves. We all have a need and desire to help each other grow. And we sure don't need the rest of the world to interfere.

Years ago when we passed NAFTA our biggest mistake was not that it went too far, it didn't go far enough. Oh we moved jobs to Mexico and US manufacturers saved money, but at what cost? We didn't protect the workers down there like we protect them here. We didn't make sure the people of Mexico got a better standard of living, decent homes, food and housing and a better education for their children.

Maybe it is time we stepped back and did it right. Maybe we need an agreement based on a shared interest in creating energy independence for all three nations. One that assures that excess profits are invested in the people, in their standard of living and quality of life. Maybe we should stop glamorizing the excesses like the development of Dubai and start focusing on the real world which is the people living in our three countries in substandard conditions with inferior education and jobs in the wrong place.

Take the current popular energy issue. Every day McCain and Obama cram more and more ideas into their energy programs, sometimes changing from the day before and sometimes saying things that are just plain crazy. The only thing worse than the candidates butchering of the energy issue is the press failing to challenge the candidates on their smorgasbord of mishmash to solve our energy problems.

Did anyone tell the candidates that the price of oil has dropped $28.00 a barrel? Did anyone tell them the price of gas has gone down for 18 straight weeks? How about the fact the American public knows what to do and have reduced the use of gas every week for the last 19 weeks, the greatest decline in gas usage in history? Do our politicians know while they spit out ideas like machine gun bullets and fail to take any action on anything, the people have said enough is enough and stopped driving so much, turned up the thermostats, got rid of the gas guzzlers, and reduced the amount of travel.

While the candidates run attack ads and tell us how stupid their opponent is the people have driven oil prices down. While congress goes on vacation to tell us why the Democrats or Republicans are blocking energy reform, the price of oil is dropping without their reforms. Now it is a start and there is a long ways to go but the nonsense being offered by congress and the two candidates to help us out of the mess only compounds the problems.

If the price is coming down for no reason just like the price went up for no reason then something is wrong with the system. All the nuclear reactors in the world and all the alternative energy boosts in the world will not overcome corruption in the marketplace, unfair business actions, malicious price manipulation of the futures market, and the evil intentions of oil speculators.

We need an investigation of the price manipulation and prosecution of the perpetrators of the crimes, meaningful prosecution of the bad guys, if we want to stop the same corruption from corrupting the energy alternatives. Hiring a lot more investigators and prosecutors will have an immediate effect on prices. Candidate proposals may have an effect by 2012 or later. I don't know about you but I am not content to wait until the Mayan Indians say it is the end of time (December 21, 2012) before we achieve anything.

Nuclear reactors, contrary to the vast experience of McCain, are still dangerous. Three Mile Island and Chernobyl were not jokes nor movies, they were real. I was at TMI for the multi-billion dollar clean up of that "harmless" accident. If $5-7 billion is harmless what is the world coming to? And Chernobyl, I met the kids that were victims of radiation poisoning, the kids that must remain in the hot zone for life because they can contaminate other people. Of course life for them is about 10-12 years.

There is an accident in the Ukraine and sheep die a thousand miles away in Scotland. Land from nuclear testing over the years is a dead zone for hundreds of years. Nuclear waste at our nuclear plants sit stored at the plants, vulnerable to terrorist attack, because congress cannot get a nuclear disposal facility built in the desert. When a nuclear plant wears out, and they do just like everything else, the plant must be decommissioned and that cost is now more than the cost of building the plant in the first place. Nuclear has a role but must be used with great caution.

On the other hand, there are known reserves of oil sufficient to meet the world needs for 300 more years. We are not running out of oil tomorrow. The price manipulation of oil has nothing to do with the supply and demand, the normal supply and demand. Off shore drilling, even the very limited Alaskan drilling, can only help us be more independent. But we need refinery capacity to make the various types of gas and oil we need if we get the crude locally.

Together the three nations should develop and implement a long term energy independence plan that makes all known and unknown reserves available to the producers including the Gulf, Atlantic and Pacific deep water reserves, the limited areas in Alaska that should be developed, and the many other known reserves in the countries.

As new territory is made available for drilling refining capacity must be expanded in the Americas to produce the products we need. There must be substantial incentives for alternative energy and energy conservation programs. For example, energy savings of 50% or more can be made in our older housing stock. Multiply that by a few hundred thousand homes and a real dent in energy demand can be realized.


I say withhold foreign aid to oil producing nations until the foreign governments lean on their local producers to stop speculation. If they want to play games against us then cut off our foreign aid to the crooks.

A meaningful partnership is needed between the three bordering nations, the energy companies in those nations, the conservation and alternative fuel companies in those nations, and the building code enforcement authorities in those nations. Such a partnership will protect and create jobs, stop foreign trade deficits, stop the transfer of wealth to Arab nations, and stop the out of control oil and gas prices. Together we have a chance to change history.

Oil Hits Seven Week Low - How Low Can It Go?

Last Friday oil continued its two week decline bottoming out at $123.40 for US crude and $124.39 for Brent crude, both down over $2.00 for the day. Oil peaked two weeks ago at a record $147.37 a barrel and has been falling ever since.

So what does this mean to the consumer? The rule of thumb is the price of a gallon of gas should drop 2.5 cents for every one dollar drop in a barrel of oil. Thus gas prices should fall 57.5 cents a gallon based on the decline we have already seen.

It has dropped about 14 cents meaning a true market adjustment should see an additional fall of gas prices of around 43 cents, driving the average price from $3.94 to $3.51. This should conveniently happen before the November election with about 25 cents by September.

Now that is if prices remain as they are today. I expect prices to fall to about $90 a barrel by election day, meaning an additional $34 reduction in oil and an additional 85 cents in gas. By all rights our gas should cost about $2.68 a gallon by the time the next president is settled in at the White House.

Why does it take so long for gas prices to fall? Well the oil refiners and gas retailers benefit the least from high gas prices so they are taking their time lowering prices in order to get a little of the oil profits so greedily grabbed already by the speculators and producers.

So if the market forces cannot explain the high oil prices what is the reason? Read my article on the financial institutions. It may help shed some light.

Obama Conquers Europe - Is America Next?

Over 200,000 Germans watch as Obama walks along the podium on his way to address the world. It was the highlight of his whirlwind trip from Afganistan to Iraq, Israel to Germany to France and England.

Memo to John McCain: Stop whining and start giving us a reason to take you more seriously than Obama. Ever since Obama left for the war zones and Europe McCain has been complaining about the press coverage, complaining about the policies Obama has announced, complaining about being assigned the junior varsity of the news corps since all the media stars were with Obama in Europe and complaining about every word uttered by Obama on the trip.

His "good old boy" approach to the campaign does nothing to tell us why he should be elected as the most powerful person in the world, how he will improve the image of America around the world, or how he will end the wars and stop all the special interests who are running and funding his campaign. We need solutions to problems. We need a leader who can motivate us to do good. We need a president who will go after the crooks in our financial, oil, medical, pharmaceutical, entertainment and media industries.

I thought it was pretty amazing to see an American speaking to over 200,000 Germans in Berlin and being applauded. When I see polls that say two-thirds of Europeans want Obama to be the next president I think the fact the rest of the world is taking such an interest in our election is an indication of the power of the United States and the role they hope to see for America in leading the world.

Think about it, France, Germany, Italy, Spain and England have been around about a thousand years longer than the USA. Yet in all their amazing history they have never had a minority leader, whether president, prime minister, king or queen. Only the USA, the newest kid on the block, has taken such a quantum leap forward to be seriously considering electing the first minority president in world history in a Western democratic or capitalistic society.

The people of the world stand in awe of our political system that practices what it preaches, that all people are free and everyone has an equal opportunity to be president. I happen to think that is quite extraordinary and our founding fathers should be smiling down on the land of freedom and opportunity they helped create.

There are one hundred days until the election. Both candidates have plenty of time and money to make their case to be the next leader of our nation. Let us hope they use that time and money to give us positive reasons to elect them, not negative reasons to not elect their opponent.

The United States is the sole world super power because we can stand united behind a cause for good, be more creative and innovative than any other nation when we set our mind to it, and we are the most compassionate and caring people on Earth. As long as the world is watching with such interest, let us give them an election they will never forget.



Not to be outdone by Obama, McCain is shown here meeting with the Dali Lama while Obama was meeting with the Germans, French and English. He used the occasion with this man of peace to blast Obama for his trip and to challenge the images of the wonderful reception he received in Europe.

Letters to the Editor

I got a letter from Cathe the other day asking why no new articles have been published lately. Letters to the editor are rather rare here at the Coltons Point Times but are greatly appreciated as it is the only indication people are reading and finding the stories to be of value.

So I told her I broke my brain and had to take time for repairs but the break happened at a good time as everything in the news was predictable. Truth is I was taking a break while the world caught up with my previous articles.

We made a number of predictions and suggestions on a variety of issues and it seemed as if the government was never going to get around to doing their job but slowly, often grudgingly, they seem to be getting in gear.

I suspect some of the movement by the bureaucrats might be they realize in a few months they may have a new boss and they better do something to justify their existence. There is also the calls for change by the presidential candidates and the strange policy reversals of late by President Bush that have changed things.

The Race for President
In March we called the Democratic primary and even the general election naming Obama the winner of both. The first already happened and the second is well underway. Of course the news media says the race between Obama and McCain is only a 4 percent lead for Obama. We addressed that in an article on polling stating that polls will not be accurate until after September 1 at which time we expect Obama to surge to a 15% lead and never look back.

The Oil Price Rise
For nearly two years we urged investigation of price manipulation of the futures market and finally, this week, the federal government announced the first of what could be many indictments for illegal price fixing. An expansive investigation is already underway.

The Housing Crisis
Also long ago we pointed out the impending collapse of the housing market because of over priced real estate and the proliferation of Wall street, the banks and investment houses in scam sub-prime mortgages. Well the house of cards did collapse at a cost of well over $300 billion. We urged extensive prosecutions of the mortgage, banking and financial sectors and they have also begun.

The many articles covered a host of sins ranging from medical costs to environmental issues, prescription drugs to vaccines. We pointed out that new born children now receive 26 vaccinations by the time they are two years old. No wonder our immune systems have broken down. The average older American now takes six prescription drugs a day.

We are over regulated, over stimulated, over manipulated and over weight and still we listen to the maniacs every evening on the news singing the praises for the quality of life in America while their networks suck every last advertising dollar from the guilty parties.

Television programs on our 500 channels are the dumbest collective bunch of nonsense in history, video games are the most crass and destructive forces ever inflicted on mankind, violent crime is glorified on local news and corporate crime is covered up on network news.

The price of oil and food goes up every time anything in the world goes wrong even if it has no effect on oil and food prices. Still we send the same people back to congress and our state legislatures as if they have no responsibility for all the corruption and greed that dominates our world.

Well I don't know if President Obama can change things as he will still be stuck with the same congress but he certainly can't do any worse than the last few presidents. I presented a program to Take Back America which starts to address all the freedom, choices and morality we have given up but a positive approach to problem solving has no place in a world that dwells on the negative and glorifies greed.

Still the population of Coltons Point is a couple of hundred and there are over 7,000 readers of the Coltons Point Times, not to mention the many web sites that place my articles on them so at least several thousand people are starting to look for the truth.

In order to serve that purpose and make certain Cathe has something of value to read we are now rested and will not rest again until the crooks have been driven from the capitol, from Wall Street, from television and radio, and even from the pulpits.

We will not rest until you get medical help to heal you, not keep treating you until your insurance runs out. When owning a home means something. When education actually teaches. When speculation in oil and food is stopped because such greedy speculators are threatening our national security. When foreign aid goes to countries that help us lower the cost of oil. And all that other stuff.

U.S. TREASURY SECRETARY PAULSON FUELS OIL PRICE CONSPIRACY

The Bush Administration continues to ignore the realities of world oil prices as spokesperson Treasury Secretary Henry Paulson said on June 1 that oil price increases are due to “supply and demand” issues. Just a couple of days earlier the Commodity Futures Trading Commission, a federal regulatory agency, announced a massive criminal investigation of price manipulation in the oil futures markets.

The CFTC indicated the investigation had been quietly launched six months earlier and the announcement sent shock waves through the financial sector. The Coltons Point Times has written 14 articles about the financial manipulation of the oil futures markets over the past 18 months so we are pleased a federal agency has actually started the process.

However, the CFTC may not have the ability nor the resources to undertake such a massive investigation as their targets would have to be the largest financial organizations in the world. We already disclosed that equity owners of the London oil futures market, ICE, which is a USA company but not subject to federal regulation, include two of the largest investment houses in the world, Goldman Sachs and Morgan Stanley, three of the largest oil companies in the world, Royal Dutch Shell, BP Amoco and Total Fina Elf, and two of Europe’s leading financial institutions, Deutsche Bank and Societe Generale.

The price manipulations under investigation could be the result of actions by these and all the other top financial houses and oil companies in the world and the CFTC says it has just five lead counsels to handle the cases. There are already over forty investigations launched. To give you an idea of the limits of the CFTC a spokesperson testified just ten days ago before a Senate Committee and listed reasons for the record oil price as “the weak U.S. dollar, demand from emerging economies, world unrest, bad weather and supply disruptions.” No mention was made of financial manipulations.

Now Secretary Paulson should have known about the CFTC investigation before he spoke, everyone else in the world knew. Paulson used to head Goldman Sachs, one of the certain targets of the investigation, and he knew Goldman Sachs was one of the owners of the oil futures market. Are the Bush people really that disconnected from reality or is there another reason for the refusal to acknowledge the potential for price manipulation from speculators?

Bush recently traveled to Saudi Arabia and asked OPEC to increase oil production to lower prices and they told him it was speculators driving up the price, the financial institutions, not the producers. Both the president and treasury secretary continue to get the wrong information and that raises a lot of questions about the quality of the staff in the Administration.

The CFTC was set up in 1974 to protect Americans from manipulations in the commodity markets. It was last updated in 2000 even though in 2006 a Senate Permanent Subcommittee on Investigations said there was substantial evidence of price manipulation in the commodity oil futures markets and a gaping loophole in U.S. Regulations that would lead to further speculation and manipulation.

That was the same year the Administration allowed ICE, the new oil futures market owner in London to trade American oil futures in London. Oil prices were $59-60 per barrel then and since the gaping loophole in our regulation prices have more than doubled, meaning the price impact of speculation could be $60 per barrel today.

So Goldman Sachs represents ICE in securities offerings and was an original equity owner of ICE. The current Treasury Secretary was former head of Goldman Sachs. The current head of NYMEX, the New York Mercantile (Futures) Exchange whose contracts can be bought through ICE in London, is James Newsome who also sits on the Dubai Exchange, the third and last oil futures exchange in the world. Interestingly Newsome is a former chairman of the CTFC.

The current CTFC Global Markets Advisory Committee includes Newsome and Jeffrey Sprecher, Chairman and CEO of ICE, along with representatives of J.P. Morgan, Goldman Sachs, Lehman Brothers, Citigroup, UBS and Barclays among others. The CTFC Energy Market Advisory Committee includes Newsome and Sprecher from the futures exchanges along with Goldman Sachs, Shell Oil, Morgan Stanley, Merrill Lynch, Lehman Brothers, J.P. Morgan, and others.

So the two key advisory committees to the CTFC contain many of the very firms that are under investigation by the CTFC and the largest investment houses, banks and oil companies of the world are the target. The five CTFC lawyers could spend decades searching for truth.

Why did Congress and the Administration refuse to act to close the huge CTFC regulatory loophole two years ago when it was identified? Why were no changes made in CTFC regulations to enable it to effectively stop oil price manipulations since Bush took office? Why does the Treasury Secretary ignore what may be massive oil price manipulations by the financial sector speculators? How can the CTFC investigate the largest and richest corporations in the world with five lawyers?

If Congress or the Administration have any sense they will assign all the investigative resources of the federal government to the CTFC investigation including the FBI, SEC, FTC and any intelligence service monitoring the world oil situation. If ever there was a need for a national security investigation this is it as our economy and the world economy are at risk. This could be the last chance for Bush to actually do something for the good of the people before his Administration becomes a target of the investigation.

And don’t forget these same financial and oil companies have already given $1.6 billion to the campaigns of our U.S. Senate, House and presidential candidates in this election year and another $1.6 billion will be given before November. Let’s hope $3 billion cannot buy the influence of Congress. They have also paid over $20 billion in fines for fraud and stock manipulations in recent years so such behavior may not be anything new.

STOP THE OIL PRICE CRISIS – IMPEACH CONGRESS!

Okay folks, down here in little old Coltons Point, Maryland where we work very hard to keep the march of civilization from contaminating our village even we can see the most serious roadblock to getting a grip on the devastating oil price spiral is the very institution we elect to protect us, the United States Congress.

Our village newspaper, the Coltons Point Times has presented twelve articles over the past eighteen months identifying the culprits, the problems, and the myths of the oil price mess and offering ways a responsible president or congress could address these problems.



Now we expected nothing from the Bush administration in terms of attacking the problem because we knew the administration was clueless, ignorant, or conveniently looking the other way while planning their retirement homes in Dubai. One should never expect anything from the lamest of lame ducks.

But the Congress, under new Democratic leadership the past two years and with all those wonderful promises of dynamic action to fix the wrongs of the world, they could do something about it but won’t. Oh they hold periodic idiotic hearings to show the world they are on top of things and accomplish nothing with the utmost of noise.

What the congress and administration have allowed to happen with the sub-prime mortgage catastrophe and the oil price disaster will forever be known as the darkest hours in the history of our system of Democracy. The very people we have elected to protect us have sold their souls to the devil and their hearts to big money in the biggest takeover in US history, the takeover of the US government.

There are about 450 House and Senate incumbents up for re-election this year along with the three major presidential candidates. The securities, investment, real estate, and oil and gas industries alone have pumped over $1.6 billion into their campaigns and the election is not even half over in terms of potential contributions. Our administration and congress are as green as green can get but not in terms of environmental consciousness, they are awash in the green of billions of dollars being invested in their futures.

Unfortunately if our leaders looked at the facts they might question those green billions but they don’t. Instead they keep blocking campaign reform, allowing mortgage and securities bailouts and do nothing on oil prices while they keep banking the big bucks. Of course when you spend your time kissing babies and glad-handing constituents you may not have time to be responsible but the 535 Senate and House members have over 18,000 staff and you would think they could do something to help their bosses and our protectors.

So we pointed out in a series of articles that the largest investment houses in the world have lost almost $400 billion in the sub-prime mortgage fiasco that never should have happened if the administration and congress were doing their job. We also pointed out some of the same powerful investment houses were the silent owners of the oil futures exchange while the Arab nations who were bailing our the sub-prime losers also owned a lot of those oil reserves soon to be sold on the futures market.

That information was provided in November of 2006 when the oil price was $50.98 per barrel. Today, thanks to inertia by our government the crude oil price is now over $130.00 per barrel, an increase since our first article of nearly $80 per barrel.

In January of 2007 we listed the secret partners in the purchase of the oil futures exchange in London including Goldman Sachs, Morgan Stanley, Deutsche Bank (Germany), and Société Générale (France) all among the biggest financial giants in the world, three major oil firms BP Amoco, Royal Dutch Shell and TotalfinaElf, all three among the top eight most profitable corporations in the world in 2005, and six of the largest energy companies in America.

We warned that the same financial institutions were among those losing billions of dollars in the US sub-prime mortgage market and that they were in a position to offset their sub-prime losses by keeping oil prices at record levels. Every day the price stays up these firms benefit through their ownership of the futures market not to mention the billions of dollars they manage that can be leveraged to keep the futures market at record levels.

So-called oil industry analysts who worked for these firms and were darlings of the news media were identified by us as in potential conflicts of interest by not identifying they and their employers benefited from the runaway oil prices fueled by their expert analysis that projected $150-200 per barrel. Our headlines could not have been clearer.

“Slicker than an Oil Spill”, “The JP Morgan Chase Takeover of Bear Stearns - A Trillionaires Delight”, “Oil Price Conspiracy – Kings and Pawns”, “Oil Profiteering”, “Oil Bailing Out Sub-prime Mortgage Mess”, “Politicians and Oil – the Silence is Deafening”, “Oil Analysts Drive Oil Price Records”, and Demons and the Black Gold.”

So eighteen months, twelve articles, an $80 per barrel increase in oil and over $1.6 billion poured into your campaign coffers and still nothing has happened of substance in congress. You now leave us with no alternative but a Constitutional crisis because all of Congress, the House and Senate, are co-conspirators in the sub-prime and oil price shenanigans that have resulted in destabilizing the world economy and hurting very badly a lot of innocent people here and around the world. You should be ashamed and shamed for what you allowed to happen.

It might be too late to impeach the administration for their complicity in this series of tragic events because they will be long gone soon enough and it would be yet another waste of federal money but the truth is you, the congress, should be impeached and that is the cause of our constitutional crisis.

Impeachment proceedings require that the House of Representatives bring articles of impeachment and the impeachment trial be conducted by the Senate. There is no provision in the Constitution on what to do when the entire House and Senate is going to be impeached so the American Civil Liberties Union or maybe those lawyers who have also poured $72 million into your campaigns could figure out some way to bring a class action impeachment against our entire congress. It sure sounds like a lot in legal fees could result.

In the meantime you or your 18,000 staff members should take the time to read our twelve articles and see if it can inspire you to come up with a strategy that might work to bring down the oil price. You can find them at http://coltonspointtimes.blogspot.com/ where truth is free and we make no campaign contributions.

DEMONS AND THEIR BLACK GOLD - OIL

Enough of the accusations and finger pointing, how about taking action to stop the nonsense before the world becomes the victim of the hoarders of black gold. Oil prices continue to set daily records while politicians, industries and economists twiddle their thumbs and speculate on the speculators while accomplishing nothing.

More than anything else the spiraling price of black gold is a reflection of the attitude of the world toward the United States foreign policy and the last few years America has taken a beating in international relations. What we as a nation do in the Middle East, in Asia, in South America and in Eastern Europe has directly impacted on oil prices as many nations that produce the precious oil oppose our foreign policy.

Take the Middle East for example where we have propped up the Saudi Arabia kingdoms for decades, a Muslim nation, while giving a blank check and unlimited arms to Israel to oppose the Muslim nations. Along the way we save Kuwait from an invasion by Saddam Hussein and Iraq and then we obliterate Hussein because of phony “weapons of mass destruction” intelligence. Now we occupy Iraq and after five years nothing is even approaching the life they had under Hussein.

First let us look at oil production in the world. As of February 2008 the following are the top oil producers shown in millions of barrels per day. Russia 12.93, Saudi Arabia 8.81, United States 7.40, Iran 3.93, China 3.82, Canada 3.50, Mexico 3.46, UAB 2.59, Venezuela 2.44, Norway 2.44, Iraq 2.37, Kuwait 2.29 and UK 1.65.

These are the top oil consumers of the world again in millions of barrels per day. United States 20.7, China 6.5, Japan 5.6, Germany 2.6, Russia 2.5, India 2.4, Canada 2.3, Korea 2.1, Brazil 2.1, France 2.0, Mexico 2.0, Italy 1.9, Saudi Arabia 1.9 and UK 1.8.

Finally these are countries with the most oil reserves in the world reflected in billions of barrels of oil. Saudi Arabia 266.8, Canada 179.0, Iraq 130.0, Iran 105.0, Kuwait 100.0, United Arab Emirates 100.0, Venezuela 80.0, Russia 60.0, Libya 41.5, Nigeria 36.2, United States 21.0 and Mexico 20.0. Five of the top six are Arab OPEC members and they control 55% of the world oil reserves, while all of OPEC controls 70% of all the world reserves.

Saudi Arabia has the largest oil reserves in the world, while Iraq has the third largest oil reserves in the world. The United States has spent hundreds of billions of dollars defending those countries yet these two countries have made little effort to help us during the recent oil price increases. Iran is yet another oil giant and ever since our ill-fated backing of the Shah of Iran over the people we have struggled to benefit from their oil reserves.

In fact, of all the Arab countries with substantial production and reserves, Saudi Arabia, Iraq, Iran, Kuwait, UAB and Qatar, only Iraq which we occupy has not reduced oil production this year and over the past year. In the case of Iraq they were producing 2.6 million barrels per day under Saddam. Five years after our invasion they are still only producing 2.3 million barrels a day with the third largest reserves in the world. Oil experts have predicted Iraq could produce up to 6 million barrels a day in four years but they didn’t count on the extent of corruption in the Iraq rebuilding budget. All the other Middle East nations have lowered production. Some friends.

Hopefully our leaders understand when people have the reserves and they lower oil production it means they are probably trying to cause economic damage to the USA. Venezuela seems to hate us and they have lowered oil production. On the other hand, we alienated Russia but they still increase oil exports. Our relationship with China is not particularly good but even China has increased production while lowering their projected oil needs. Canada and Mexico, our neighbors, have increased production yet we seem to ignore them or take actions against immigrants for example that contributes to our negative image. In spite of that Canada and Mexico are still trying to help.

So we can count on our friends Canada, Mexico, Russia and China to help with the oil price mess. I doubt many people consider Russia and China friends of the USA but at least they are working to minimize oil prices. In Russia they took care of the speculators and crooked oil companies by nationalizing the companies. It seems to work as they produce nearly 10 million more barrels than they need and refuse to be part of OPEC.

So is there a problem with inventories? Not really. Although U.S. crude oil inventories may be down according to Tim Evans, an energy futures analyst at Citigroup's Futures Perspective, the gasoline inventories are at their highest level since March 1993. In spite of OPEC world oil production was up 2.5% in the first quarter of 2008 over the same period in 2007 while world oil consumption rose just 2%. World production is projected to be 3.3% higher in the second quarter and 4.1% higher in the third quarter than the same periods a year ago while world demand is projected to rise by just 1.6% over the next six months.

The tenuous nature of the economy has caused oil demand to fall in some countries. According to economist John Kemp at the commodities firm Sempra Metals, the U.S. consumed 4% less petroleum in January 2008 than it did the year before. With China reducing the expected increase in oil demand world surplus oil production capacity has gone from a very tight 1.5 million barrels per day a couple of years ago to more than 3 million barrels today, says petroleum economist Michael Lynch.

So supply is up and relative demand is down. Inventories are up and reserves are more than adequate, yet the price of oil continues to rise. Why? Exxon Mobil CEO Rex Tillerson blamed a third of the recent run up in oil prices on the weak dollar, another third on geopolitical uncertainty, and the rest on market speculation.

I have my own reasons and they can’t be any worse than Mr. Tillerson. We can blame a fourth of the rise on the Demon Retribution for Bush foreign policy, a fourth on the Demon Manipulation for oil company tax and refining capacity shenanigans, a fourth on the Demon of Deceit for conflicts of interest in our financial institutions, banks and media where expert oil analysis profits the companies with no disclosure of the analyst ownership conflicts, and a fourth Demon of Greed in market speculators who are probably the same financial institutions, banks and media experts manipulating the price through the futures markets.

Note that I have not mentioned congressional inertia, Administration bungling, the federal agency non-responsiveness nor the media ignorance as major factors in the price run up because I can’t imagine they have any ability to react quickly to anything while the coffers of the national political parties and candidates are so bloated from oil company contributions their reaction would be highly impaired. As for the media, well look where the advertising revenue comes from to pay for the network news team that covers the news.


Is there hope? Sure. The Mayan calendar says the world will end in the last year of the new presidents 1st term, 2012. That would certainly bring an end to foolish politics, haphazard enforcement of corruption laws, rampant greed and spiraling oil prices.

OIL ANALYSTS DRIVE OIL PRICE RECORDS HIGHER

Today, Tuesday, May 6 oil analysts again predicted more records for the oil prices and in response the market again set a new record reaching over $122 per barrel before settling at $121.84 a barrel. The analysts predicted prices could reach $150 and then $200 per barrel. Sure enough the market responded with a new record.

A team of analysts from Goldman Sachs made the prediction in the media and triggered the price increase and NBC News then had their own oil specialist, John Kilduf of Fimat USA confirm the numbers. So what do you think?

Well, Goldman Sachs is an investor and the lead broker for the IntercontinentalExchange, Inc., owner of the London Futures Exchange one of the two leading oil futures markets in the world. In the old days such action by Goldman might be construed as a conflict of interest and an effort to manipulate the price of oil.

Then there is the NBC news report. It seems their independent analyst works for Fimat whose name has been changed to NewEdge who just happens to be a wholly owned subsidiary of a wholly owned subsidiary of Societe Generale (SG), one of the largest banks in the world from Paris.

Surprise, Societe Generale was a founding partner of the IntercontinentalExchange (ICE) and benefits significantly every time the price of oil increases. So now both Goldman Sachs and NBC have offered experts whose companies directly benefit from the oil chaos and neither Goldman, NBC or Societe Generale disclosed the insider position they have in ICE and the oil prices.

Now where is Congress, the Justice Department, the Bush Administration, the presidential candidates, or even the news media in exposing this farce? How long do the American citizens and citizens of the world have to be victimized by such tactics before someone says “Stop” and investigates? Before you vote for any congressman or candidate for president ask them why they are not stopping these market manipulations.

If they continue to ignore them or you then vote them out of office. This is still the country of the people, by the people and for the people, we just have too many politicians who forgot.

POLITICIANS and the OIL CRISIS – The SILENCE is DEAFENING

So America is faced with the fastest, most unjustified oil price spike in history, a situation that is having a devastating effect on the economy of America and the world. We have three candidates for president, 435 Congressmen up for election, 100 Senators, a few hundred specialists in the DOE, EPA and Agriculture not to mention the plethora of so called “energy experts” in banking, stocks, finance and the oil industry yet no one is telling us how to deal with our current crisis.

The laws of supply and demand have been obliterated by the forces of greed and the price of oil continues to increase every day setting new records driving the price of gas, diesel and aircraft fuel to record highs. Americans drive less, consume less, and spend less and still the price spirals out of control. So why are the people we entrust to lead us silent?

Why are we spending $500 billion to save Iraq in which they were going to repay yet we can’t get the revenue from the oil now being produced by Iraq? Did you know Iraq was producing 2.6 million barrels a day of oil before the American invasion? Just last February production reached 2.4 million barrels a day. In spite of the Bush military surge the oil production can range from 1-2.4 million barrels a day depending on the latest bombing targets by Al Qaeda.

The Bush boys tell us oil was not a factor in the war but did they also mention Iraq has 112 billion barrels of oil reserves, second in the world to Saudi Arabia? They also have 112 trillion cubic feet of natural gas reserves. Economists expect Iraq to reach 6 million barrels a day in production in four years yet none of it seems reserved to repay the USA the $500 billion plus or supply some of the USA needs. In fact, if Clinton or Obama get their way and we pull out of Iraq China or Russia will step in and take control of the 2nd largest reserve of oil in the world.

If refining capacity is a problem, which it is, why aren’t we fast tracking new refineries? No new refineries have been built in America since 1976 when crude oil sold for $12.37 per barrel compared to $112 per barrel today. Based on our military and aircraft needs alone increased refinery capacity should be a matter of national security. Perhaps American oil companies should build refineries in secure friendly countries as well?

Reduce our plastic use in fast food containers, bags and the many other uses, all which are very detrimental to the environment, and oil use goes down. A dual benefit and no one seems to be calling for the change. Paper bags always worked well and hemp stands ready to fill many of our needs if the federal government ever realizes you can’t smoke the stuff.

Any oil producing country dependent on our food should be selling us oil at a discount and most countries of the world are dependent to a large degree on our food. Fact is food is the one commodity more important to world stability than oil as you can see from the current food riots around the globe.

Require one third of all cars sold in America achieve 50 miles per gallon in 3 years and a substantial drop in demand will be achieved. Current regulations concerning the average mileage for an auto manufacturer’s fleet are ludicrous with the truck and SUV exemptions. Forget the fleet averages, the economy and cost of fuel will dictate buying patterns.

Besides, let American consumers decide if they want to pay extra for gas, it is supposed to be a free society. If a high mileage car is available consumers will buy it. We know it can be done because I have a 1946 Austin (UK made) that got 50 miles per gallon. If we could make them 62 years ago we can make them today.

Encourage Americans to stay home and take local trips rather than long vacations, subsidize mass transit to reduce autos on the road, and increase train use for up to 500-mile trips. When it comes to intercity travel trains come out on top of all other transit modes other than walking or bicycles.

Extensive data and statistics are available which show that passenger trains consume just one-quarter to one-third of the energy which automobiles and airliners consume, a fact the DOE refuses to acknowledge. Buy more trains and subways, we already own the facilities and right-of-way, and save on energy use, emissions and road maintenance.

Oh yes, what about the tax on gasoline and diesel fuel? State taxes can range from 14 to 45 cents per gallon and combined with federal taxes that are 18 cents a gallon the government gets an average of 45.9 cents per gallon, with states typically ranging from 32.5 to 63.5 cents in taxes per gallon. How about suspending taxes and not just the federal like McCain said? Perhaps a tax credit or full deduction for gas taxes paid might help.

Now these are just a few of the things politicians could be saying to help our short and long-term energy needs. Why are they silent? They are the office holders or want to be our elected representatives. I guess even experience doesn’t help politicians solve problems.

GEORGE SHOULD HAVE BEEN DANCING

If President George Bush had been dancing with the people rather than with his advisors he might have had a chance to leave behind a positive legacy for his presidency but he didn't. The closer the president gets to his final days in office the worse his legacy grows as it appears more and more likely that he never should have been president in the first place. No doubt Bush is a good guy at heart. There were even some things he tried to do that were right. But he was too easily influenced by the relentless right to remember he was elected to serve all the people not just a few.

So here we are, in the twilight of his 8 years leading the most powerful nation on earth, and where do we stand? The leaders of the international terrorist group that brought us 9-11, the worst loss of human life in America since Pearl Harbor, remain free and continue to cause international chaos. Two wars have been fought costing us nearly a trillion dollars to stop them and both wars are nowhere near being won nor the terrorists caught. There is no stability in the Middle East, the same situation he inherited in 2001.

We are back to being suspicious of Russia, more suspicious of China and still waiting for Castro to die. Thanks to the commitment of Bush to carry out NAFTA which was passed under Clinton, millions of manufacturing jobs have moved from the USA to Mexico where poor wages, the lack of health care and high crime rate have caused the number of illegal immigrants to increase, not decrease.

World opinion of America has dropped to the lowest ever while the approval rating of the president is also the lowest ever recorded. With approval for Congress falling far below that of the president it seems government in general has fallen out of favor not only with foreign people but also with the people of America.

Our wars without end have driven up prices for consumer goods, led to a major economic retrenchment nationally, and pushed the entire world to the brink of economic catastrophe. The Bush administration failed to see the futility of war, failed to see the dark clouds in the economy, failed to see the price of oil, gold and food reach historic highs and failed to police the rampant corruption in the housing and financial industries.

On the home front he failed to address immigration reform, one of his top priorities. He instituted a wholesale attack on individual rights and freedom with his domestic efforts to stop terrorism. Every effort to aid big business from tax cuts to the war efforts have failed to accomplish anything except line the pockets of the rich and assure multi-million dollar bonuses for the corporate leaders who stole America blind.

In terms of protecting America he has worn out the heroic members of the military, abused the domestic National Guard by sending them across the world to fight wars, and destroyed families by continuing to extend the time the National Guard was stuck in Iraq and Afghanistan.

With this kind of a legacy Bush might want to see the End Times come fast so his administration cannot be judged to unkindly by historians. Then there is VP Cheney, yet another of the many advisors to Bush senior whose ideas were worn out and totally unsuited to the treacherous waters facing Bush the Younger.

Anyway Jimmy Carter can tell you all about nice guy former southern governor presidents and the price they pay for trying to help out. Don’t get me wrong, it is not as if everything about Bush was wrong. He must have done some good things. Certainly First Lady Laura was a bright light in the long night and his kids were entertaining. The fact Jenna refuses to get married in the White House might indicate just how she feels about life in the fishbowl.

So dance away George and just maybe a few things can go right in the next few months. You really have nothing to lose.

IS OIL BAILING OUT THE SUB-PRIME MORTGAGE MESS?

The Big Fix?

We all know how the investment banks, financial institutions and brokers tried to manipulate the American mortgage market and in their greed lost site of good business practices and created a stock scam called sub-prime mortgages which were then packaged and sold by Wall Street. With the feeding frenzy created by this illusion of housing prices raising ad infinitum the greed moguls and the greed mongers accepted millions of mortgages from people with no ability to pay them.

Stock was sold over and over again until the very citadels of our financial sector, the very banks and investment houses we rely on to protect our savings, protect our retirement and manage our economy were inundated with high risk holdings. Then a very unusual thing happened, truth prevailed. Housing prices stopped increasing because they were already way beyond the real value of the property.

Suddenly our trusted money managers were left holding billions and billions of dollars in inflated adjustable rate mortgages, and the home purchasers had no chance to make the escalating monthly payments. Mortgage defaults by the millions were set in motion and the money managers, also entrusted with our hard earned savings, retirement funds and stock holdings, lost billions and billions of real dollars, a total estimated at over $215 billion on mortgages alone.

Then the stock market prices collapsed as the backbone of our financial sector was swamped in losses and unable to explain how greed overshadowed laws and how they were willing to sacrifice the financial well-being of their clients to protect their own jobs, bonuses and buys out to the tune of hundreds of millions of dollars. So where do the pillars of finance stand today?

To avoid bankruptcy and avoid sending the world into economic crises they secured massive amounts of money from China, other Asian countries and the oil rich Arab world. So what is the price they paid to be bailed out by foreign money? Better still, what is the price we paid for our financial citadels to be bailed out by foreign money?

Today we see the same laundry list of financial powerhouses trying to regain their strength and stability in the market and lo and behold what happens to the market? First the oil prices defy every law and principle of accounting and keep skyrocketing at a pace never seen before. Second, virtually all other sectors of the market with the exception of gold collapse, almost as if being forced down so SOMEONE can step in and buy stock at depressed prices to salvage their balance sheets.

If this were a thoroughbred race, yet another industry being taken over by the Arab oil money, one would say the big fix is on. Something very crooked is being done to make someone an awful lot of money and they are playing with grey areas of the law to make it happen.

Well Congress and the presidential candidates should ask who is benefiting from the spiraling oil and gold prices and the collapse of the stock market. Then Congress and the candidates should do something we haven’t seen in many years. Do something about it! If the financial institutions that lost $200 billion of our dollars, not theirs, have decided to artificially maintain high oil and gold prices and low stock prices so they can regain their credibility and stave off any investigations by a gutless congress and the more gutless international group called the World Bank then maybe it is time to repopulate the jails with people who deserve to be there.

Every financial institution in the world should be investigated to determine if they are profiting from the rigged oil prices of today. Expose their layers of hidden equity to see if they are owners of oil related companies or markets responsible for setting the oil and gold prices. See if they invested in such companies for themselves or if they allowed their little investors to benefit by including them in the holdings.

See if there is collusion between the oil producers, futures markets and banks and investment houses to prop up the oil price in order to offset the billions in sub-prime mortgage losses. And when you find the evidence, then do something about it. Oh yes, and while you are at it you better stop taking the millions of dollars in campaign contributions being thrown at you by these blood-sucking profit rich companies or you are also part of the corruption that has cast a dark shadow over the lands.

Public enemy number one in the oil crisis are the energy analysts and while there used to be just a conflict of interest involved because some analysts work for companies with major oil holdings, recently the government analysts like the U.S. Department of Energy have further fueled the oil price spiral with dismal forecasts for summer prices.

These analysts cannot explain what is happening in economic terms, as there is no justification for the profit gouging. So why are they not probing into the financial collusion that may exist and may be driving the prices up? If an analyst cannot tell us what is going on in the market then they have no business speculating on the future prices.

If there is market manipulation to virtually guarantee excessive profits then why is the U.S. Justice Department silent? What about the Federal Trade Commission or the Securities and Exchange Commission or the Interstate Commerce Commission or all the committees in the House and Senate looking out for our interests? Don’t any of them see that their continued silence is allowing the worst-case scenario to happen?

In the end, no matter what government action does or does not take place, every member of the House and Senate that ignored the public during this time of crisis should be thrown out of office for benign neglect of the public interest and if they accepted campaign contributions from these industries and they are proven guilty of price manipulations then the members of Congress should be impeached.

THE OIL PRICE CONSPIRACY - KINGS & PAWNS

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.

World News Recap

The Democrats have now been in control of congress for the first quarter of the year and how are they doing with their laundry list of immediate promises?

The stock market has collapsed, regrouped, and collapsed again.
The trade deficit set another record.
No news on immigration reform.
No news on campaign reform.
Oil prices are skyrocketing again for no reason.
Congress still refuses to investigate the interlocking ownership in oil.
Housing foreclosures are setting new records.
About half of congress is running for president.
The war in Iraq continues as if congress doesn’t even exist.

Hey, things remain pretty much the same and that’s all I have to say about that.