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Oh Dear! Politicians may make things worse!
Monday, May 26, 2008
Ambrose Evans Pritchard notes in this Telegraph UK report that the German government is about to make things worse in world energy markets.German leaders are to propose a worldwide ban on oil trading by speculators, blaming the latest spike in crude prices on manipulation by hedge funds.
Well, pure speculation plus the fact that the world now consumes more oil than it can produce and that is likely to be the case for years to come.
It is the most drastic proposal to date amid escalating calls from Europe, the US and Asia for controls on market forces, underscoring the profound shift in the political climate since the credit crunch began. India has already suspended futures trading of five commodities.
Uwe Beckmeyer, transport chief for Germany's Social Democrats, said his party would call for joint measures by the G8 powers to prohibit leveraged trading on energy contracts. "It's an extreme step but it has to be done," he told the Berlin media.
Mr Beckmeyer said the last 25pc rise in the price of oil to $135 a barrel had nothing to do with underlying supply and demand. “It’s pure speculation,” he said.
Is there an election in Germany this year?
2 comments:
Moin from Germany Tim,
pure populism. Just like Hillary and MacCain....
I have never heard of him until i´ve read your post.
The Germany's Social Democrats are indeed in a freefall close to post war lows and are facing pressure from the new communist party "Die Linke".
And it wouldn´t surprise me if we will get a split of the coaltion from SPD and CDU very soon. Since they have made the coaltion they have taking both big losses at almost every election in the states. They are blocking each other and the small reforms that were done in the past have hit the wall.....
Wait until the strong Euro has killed the strength in the exports and the party landscape will take a dramatic turn....
Even if it is 100% speculation, what is the result of the speculators action? They will cause more investment in oil exploration, production, and infrastructure, plus higher investment in alternative energy.
One important thing left out of all the speculator bashing is that they expect to make money. If they're so wrong, are all these politicians taking big short positions? If not, why not?
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