It was oil prices that caused much of the home mortgage squeeze. That in turn caused banks and finance institutions (since Reagan, somewhat indistinguishable from each other), which were playing Vegas-style gambling games, to run short of money. Those institutions thought they were safe since they bought insurance contracts, but they bought those contracts from companies that were themselves subject to mortgage repayment failures. And now the bailout is not even going to be used for its governmentally requested purpose. Well, pretty simplified. But it summarizes my investigations which I've posted here in several parts.
Now I want to re-iterate an initial cause of thie whole chain of events, one that has not been widely recognized yet. It was NOT oil demand, but rather oil speculators. Demand didn't shoot up in just a few short months. The world just cannot consume that much oil in such a short period. Even the dramatically increased consumption by China and India could not have caused it.Speculators NEVER want the product delivered, as that would cost them money for transport/storage too and they would have to actually DO something productive to earn that money. Heaven forbid!!!Speculation is not actual use, storage, or transport for a product, just the money that represents it; it is not real product demand. It is merely a paper transaction based on contracts saying, essentially, that we'll deliver it to you as of a contracted date, unless the entity that is supposed to deliver it to me doesn't come thru because his supplier might not come thru either, etc.; in any case, as none of us are in physical possession of it, we'll do the best we can.
Here's an editorial that includes actual sources that the delineate the speculation mechanism: http://www.counterpunch.org/ahmed06182008.html. There are others. My US Senator Charles Schumer (D-NY) in his letter to me shows that this is pretty well recognized. I guess my question is why the news channels do not bring out this information. Since all the world now is hurting by this chain of events caused by oil speculators, this would seem to be the root CAUSE and would then seem to need to be addressed.
Capitalism is not all a bed of roses; some thorns are in there too if you don't know where you are going.
AGAIN IT WAS NOT DEMAND.






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