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Wednesday, July 8, 2009

Thank goodness. This is way overdue

It's reported today on the front page of The New York Times, among other places, that our government is analyzing curbs on the speculation of energy on the energy markets.

Thank goodness!

This is, as I said, above, long, long overdue.

Back in 2000, as I wrote here earlier, the "geniuses" at Enron got our government to do away with any government regulation of the energy markets.

What a mistake.

Sure, people and corporations could make great gobs of money but, in the meantime, companies like Enron could take energy out of, oh, say, a state like California with one sale, and then send it back in a new resale, to that same state.

Sound familiar?

It's why California had rolling blackouts all those years ago.

It nearly broke the state of California and its residents.

Sure, people were making those boodles of money, but the State of California--and, indeed, the whole country--was weakened, severely, both the state and the United States. It was an insane time for energy, energy trading and the people of California, who were at these trader's and corporation's mercy--or, rather, their lack of mercy.

This was also why the world oil markets took the price of a barrel of crude up to $147.00 per barrel a year or so ago, giving us $4.00/gallon gas at the pump.

It crippled households, their budgets, states and their budgets and the whole country.

An extremely small group of wealthy people 'round the world were getting richer while the middle class, the poor and businesses were crippled and at the mercy of the price of a barrel of oil.

The reason it's so important that we pass these curbs and bring back some regulation of oil and energy markets is because we are in such a deep and worldwide economic recession (at least) right now and we need stability in these energy markets. If we don't know where our costs are going to be in the future, how do we know what we can invest in? It makes our economic crystal ball impossible to read, as if it's not tough enough already.

And all we're taking away is the action of people "betting", in essence, on the energy markets, so they can make money and that's insane. That betting (purchasing oil and energy stocks, in hopes they'll go ever higher) can have the effect of breaking nations, households and businesses banks and pocketbooks, a dangerous possibility.


Link:
http://www.nytimes.com/2009/07/08/business/08cftc.html?th&emc=th

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