Quick, Everybody Blame the Speculators!
This is awesome and all but what are federal regulators going to do about the guys who have tankers full of oil floating in the middle of the ocean? Or what about the bearded freak who is printing more dollars than even Scrooge McDuck could swim through, thereby directly impacting the price of oil as it is traded in - surprise! - dollars?
Federal regulators charged five oil speculators Tuesday with manipulating the price of crude and making a $50 million profit from the scheme.
The Commodity Futures Trading Commission alleges the speculators bought enormous amounts of actual crude oil for sale in Cushing, Okla, during the early months of 2008.
This created a perceived shortage of oil in Cushing -- a major point for oil delivery -- and drove the price of oil futures contracts higher.
The speculators then bet the price of oil would fall by selling so-called "short" contracts to other investors. When the speculators sold their actual oil holdings in Cushing en mass, the price of oil did fall, netting the group a hefty profit.
Speculation can be a beautiful thing when executed correctly and in normal circumstances. Of course, we all know this is far from a normal market and the powers that be have a long way to go before they can say they are in control of the situation. Given those facts, it makes sense that certain failing politicians might want to put the focus on speculators, if only to offset the blame associated with failing miserably at economic revitalization.
But that's just my $0.0000002.