Our Treasury Secretary Pumps For OPEC

How appropriate. How ironic. Bloomberg quoting Hank Paulson on a plane heading to Jeddah, Saudi Arabia "If you look at the facts, they show that the price of oil is about supply and demand". Duh!? -- Thereby echoing the oiligopoly's dissembling mantra, which was hereby characterized in a recent post, namely "supply and demand is what you say when you want the other person to know that you think they are an idiot" (please see "Oil -- Congress Finally Takes Charge Yet Must do Much Much More" 05.29.08).

This from a man who is clearly aware of the collusionary workings of OPEC, a cartel whose actions in restraint of trade through limiting supply, would land them in American jails were they not protected by sovereign immunity. Further he must have certainly been aware of the intentions of a newly awakened CFTC whereby his colleague, Acting Chairman Walter Lukken, said in an interview just days ago that the CFTC "will leave no stone unturned" to make sure the oil market isn't being manipulated.

Given the clear facts (OPEC is not a figment of anyone's imagination) Paulson's statement gives underpinnings to perhaps the greatest swindle in history, the current price of crude oil on world markets. Certainly a heist from the world's pockets of this magnitude needs cover and validation by those in positions of authority lest we wake up to the fact of how badly we are being fleeced. And that is what Hank Paulson, our Secretary of the Treasury, brings to the table.

Now why would a man so obviously knowledgeable go out of his way to coddle members of the OPEC cabal and the oil industry generally? Consider the following: certainly Secretary Paulson is fully aware that these very oil states accounted for about half of the $3.3 trillion of the assets currently parked in the world's sovereign wealth funds.

And while visiting the region he has made it clear that the "United States continues to welcome investment from this part of the world." In a few months time Hank Paulson will no longer be Secretary of the Treasury. Perhaps this is the reason Paulson, an old Goldman Sachs hand, is so keen to whitewash the manipulations of OPEC, the Middle East's torrential money machine.

Comments

[americaforme]

Keeping us wipped up in a lather, over OPEC, and Paulson, the players in Washington, have established a beachhead, in San Diego (Blackwaters West Coast Training Center). These new features effectifully placed by box cars. If we cant deal with new dangerous events,(Blackwater training the Navy in San Diego) how on earth can we get this oil thing turned around.

[Shortyfuse]

The heck with cspan and their puny archives. Here is the meeting
http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=1c9f4e27-376a-49c8-a244-25730c4bbbe8

[Shortyfuse]

Thank you for your comments.
On Monday, on Cspan, I listened to a guy state that at least 50 percent of oil price was speculation and that Dubi and the British were in charge of monitoring the glut. It was a very good meeting with lots of answers and a bigger picture of what is happening in the hands of Bush. You would get a better picture if you went to the Cspan archives and find the meeting. I have limited writing and memory abilities. This meeting is a must see for those looking for the big picture and you will never see it on corporate media.
And what a laugh the next day to see one after another of Texas Republicans stand up and hollar for more drilling. Scum. do you think that we could get one of them to commit to selling the oil drillled here to stay here. Fat chance. At the meeting Texas oil was singled out for their dealings with Dubi.

[drblack]

8% of The oil the USA uses everyday is because of Iraq,Afghanistan and the Strategic Oil Reserve.

[Nitehawk]

Is that pumps or pimps?

[JackMehoffer]

OPEC's oil fields are almost as old as Learsy.

[WIpatriot]

OPEC has to do something with all their petrodollars. Hankie wants them to come back here so the fed can retire them and contract the money supply. Guess what happens then....

[FreedomCorpse]

Unregulated futures trading is playing a big role in all of it. Supply and demand...yeah sure.

[darthdarcy]

The greatest swindle is what it is and that's what I've been saying for weeks as I have some insight due to family background..Secretary Paulson is lying to America in a big and serious way when he lies to them telling We The People that these energy prices are due to supply demand he knows that's untrue yet he chooses deliberately to lie..lie lie lie lie over and over just as every member or this administration has lied about almost everything for the last nearly 8 years..!

Today we had the chance to see and hear from once again Professor Michael Greenberger who was the Director of the Commodities and Futures Commission I have seen and heard him before both of C-Span Journal and NPR..Today along with George Soros, and others testified before the Senate Commerce Committee and one thing is true we can almost immediately get the prices under control by re-instituting the regulations that will undo the Enron loophole that is responsible for our Sub Prime, Oil and Gas prices and the food prices and crisis..

Google Michael Greenberger learn and hear as much as you can this country is under attack by these swindlers like Phil Gramm and Morgan Stanley and Goldman Sachs, Dubai , West Texas, and London traders..

It's nothing less than asymmetrical economic warfare against America...!

Go hear Michael Greenberger any where you can..Google him and you'll learn and hear it all..

[argeec]

I agree.
Part of the testimony was that from 25% to 50% of the current price is due to speculation and that Morgan Stanley and Goldman Sachs are actually hoarding oil now.
The hearing was before the senate subcommittee chaired by Sen. Cantwell.

[Bladernr1001]

I think I understand your perception that supply and demand is not at work here. In some regards I may actually agree with you but probably not in the way you are thinking.

When prices of a commodity increase that has the effect of drawing more players into the business of supplying that commodity due to the percieved higher profit margins to be had.

I think our own government is hindering the natural playout of this process by so severely restricting our ability to extract the resources we have remaining on our own soil. Had we been further developing nuclear, mining oil shale, drilling in ANWAR, etc, etc. we would not be having this conversation right now. We have handed this power to the OPEC by our own actions. Our government actions over the years are hindering the proper functioning of our capitalistic system.

[vippy]

Well, first of all, we get most of our oil from a) Canada, b) Mexico and c) Venezuela.
We get little from the Middle East. Here in TX and OK oil well owners can only pump
500 gal per month and get paid much like the farmers do for NOT PRODUCING.
We have enough oil in Alaska for the whole of the USA for the next 200 years. What is
being pumped in Alaska right now is being sold to Japan. Does that make sense?
Why is it that not only the oil in the USA costs so much but also in the rest of the world.
China has downed their demand for oil by 3.5% yet the market did not adjust.
Our gas consumption is down and still, no adjustment. I hear gasoline refineries
saying they are not making money. Write to your congressman/woman and demand
they change the way the oil is being traded via Future's Market, oil being traded on paper
rather than real deliveries by demand. Let us get off our duff and do something!

[joebaggadonuts]

No Blade. Wrong. Had we further developed sustainable and lower emission energy sources we would not be having this conversation now. Had we not had George Bush as president we would not be having this conversation now. Progress is moving to better technologies, not staying with old industries which press their capital advantage into political advantage to the detriment of the new. Keeping the incentives for oil exploration rather than investing in efficiency, new material science, alternative energy sourcing and edumacation, that's the real problem. We did it that way because we got a theiving oil man as president.

[GetAbike]

As much as I liked Mr Learsys post, his next post should explore the question that every true American has asked- "What is our oil doing under their sand?"

[seawolf77]

Exactly. The America I grew up in is gone. Ronald Reagan, President Feel Good, made sure of that when he totally junked conservation and went on a borrowing spree the likes of which the world had never seen. And just like a household that does the same at the end of it all what do you have. A house full of junk and and bills out the wazoo and your future GONE. Thanx a lot Ronnie. That shining city on the hill just went dark casue it can't pay it's power bill.

[seawolf77]

Mr. Learsy is so completely wrong on so many levels it is difficult to know where to begin. First of all , what would you do if you owned all the oil. Duh. It is people exactly like you that continue to make these Faustian bargains in the minds of Americans. IT IS THEIR OIL! We have absolutely no right to demand more. They have every right to deny us more. PERIOD. We are the capitalists for Christ's sake. While many would argue imperialists, that's another blog. Stop pretending the world has not changed, stop keeping alive the notion this is temporary and soon we will be able to waste away again to our heart's content. STOP IT. America must change and the sooner the better. Yes the change will be drastic and our lives forever changed. That as they say is that. The good ole days are gone. Look in the mirror. That is the problem. Fossil fuels are beoming fossil like, hard to find and incredibly valuable. Get past denial.

[vippy]

I agree with the statement we must change. However, it has little to do with what they are doing to us now. Those who lost their pants last year in the oil market are now swarming to the other
commodities like food and ergo, sky high prices and we fell that too. But the public is lazy and
they are so predictable. Should I say, we deserve what we get?

[fact finder]

seawolf; You are almost 100% correct. The exception is that there is enough oil in Colorado to supply the U.S for many many years and this does not include the vast reserves under the ocean or in the other 49 states. Bush and Co. have and are allowing big oil oil and the futures market to manipulate oil prices. The reason's for this manipulation are many but greed tops the list.

[GetAbike]

Good comment. I have to laugh though as I understand the frustration you feel reading this stuff.

Do you think Mr Learsy reads these comments? I wish he would as he might realize that he could have more to write about besides the "Big Conspiracy To Bilk hard working Americans". Besides, there is already a shift going on in the U.S. that can't (or shouldn't) be ignored, albeit probably too little to late.

Anyway, carry on.

[Thermodynamics]

If Enron Could do It Then Big Oil Can Also

Even though relatively small compared to the total market Enron managed to manipulate the market price of electric power. The state of California spent billions subsidizing California utilities to keep the power flowing. Enron bought and sold from themselves and ultimately made extra profit because they had "gamed" the price up.

And remember, Kenneth Lay was a big Bush supporter.

One key to this is a loophole, still in existence, that permits certain types of electronic commodity trading to go unreported --- "dark markets" , "dark pools"

Who are the wiseguy traders gaming the oil market? Big Oil? The Saudis? Hedge Funds? Halliburton?

[Bladernr1001]

I might point out that Enron would not have been able to game the market if it was not for the inane arrangement that CA utilities commission put in place. They regulations allowed for untility companies to charge more for out of state power than in state power. So traders in Enron would buy the power in CA rout it to to say OR and then sell it back to CA providers at a profit. This would not be possible in a true open market. The CA deregulation scheme put together by the pols was not true deregulation and was hoplessly twisted up in the politics of the day. I think we should fired all the CUP commissioners and pols along with Enron.

Read this wiki article:

http://en.wikipedia.org/wiki/California_electricity_crisis#The_involvement_of_Enron

[talking snakes]

I wish i could remember this gentleman's name.......but he blogged that the real problem is that oil is the only fuel that our cars can use. Thus there is a lack of competition in energy sources. His solution is to mandate flex fuel cars.

[LateDave]

Mr. Learsy is essentially correct. Ever since the first oil crisis under Nixon (of "double nickel" fame) at the founding of OPEC, the sheiks have been doing whatever they wanted to. They don't particularly need the money; they're simply taking over the world. As taught by Lenin, the capitalists at Standard Oil (Exxxxon), Royal Dutch Shell, Chevron, British Petroleum, Agip, the Russian state monopoly oil company, and the rest of that handful are selling the sheiks the rope that will be used to hang them. Well, the Russkies may wind up winning; can't say for sure.

I suspect that the sheiks can still play pretty rough, although they haven't needed to with Republican presidents all these years. Cut prices in half and destroy solar/wind/geo. Cut supply and destroy the dollar. Ratchet up the death-to Israel rhetoric, boost the next-of-kin bonuses to despondent Arab street youth and watch the West tear itself to pieces. Pingpong futures contract prices the way the Enron idiots (friends of W) did in Calfiornia. Have a major "accident" or two or three - ships? refineries? wellheads? How about a Liberian-flag single-hull supertanker full of Arabian Gulf crude slams into a Gulf of Mexico drill rig? "Oops, sorry!"

It's a dangerous world out there. Having an entire U.S. administration totally prostituted to the House of Saud is pretty grim - and that is exactly what we have.

[YellowPanties]

Mr Learsy, you fault OPEC but not capitalism. You ask rhetorically why Paulson would cozy up to OPEC but isn't the answer obvious? From your years as an import/export man, you should know that greasing the wheels of foreign markets/officials gets your product into places where it can be bought.

It's a little disingenuous to call OPEC an illegal outfit, when they are merely engaging in mercantilism. You call this an epic "swindle" but the swindle has been going on for decades, and it's only the recent pinch that has anyone crying.

Could you explain your article more, please, because it seems what you're saying is it was okay to get held over a barrel by OPEC when it was a little cheaper and now that they're tightening up, they're criminals.

Isn't US energy policy, capitalism, and the GOP the real culprits here? Thank you.