“We are in the Midst of an Epochal Tectonic Shift”
Lars Schall - March 12, 2011
Mr. Engdahl, is the oil price by and large driven by massive speculation? Mike Norman, the Chief Economist at the Wall Street firm John Thomas Financial (http://www.johnthomasbd.com), wrote to me in October of last year for example:
“Total NYMEX open interest in crude is 1.4 m contracts or about 1.4 billion barrels of crude. Daily volume of crude traded on NYMEX is over 1 billion barrels per day. Total daily global demand is only 83 million barrels per day. The amount traded on one single exchange is more than 10 times total daily consumption. It’s a giant casino with prices being driven up by speculators and consumers having to pay more and more.” (i)
What’s your opinion on that?
FWE: I wrote back in the 2008 period, when oil briefly spiked-up to $ 147 per barrel and Goldman Sachs was issuing client-advisories that it was going quickly to $ 200, and when JP Morgan was advising the Chinese government that China ‘buy all the physical crude you can get your hands on because it is going to $ 200,’ at that point I wrote that roughly 60-70% of the price of oil then was pure speculation, manipulated by the GSCI, the Goldman Sachs Commodity Index. It’s a perfect scenario that they have created on Wall Street to control the oil price irrespective of supply and demand. (ii) I would just add that the crucial ingredient these days is not the NYMEX for the global oil price benchmark, but the ICE Futures in London.
Why do I say that? Because the ICE Futures is a daughter company of the International Commodity Exchange of Atlanta in Georgia, owned by Goldman Sachs, Morgan Stanley, JP Morgan Chase etc. – the big oil banks that benefit enormously from the inside. There is absolutely no serious regulation of the ICE Futures. The British keep their hands off it, and the U.S. Commodity Futures Trading Commission, the CFTC, since 2006 under the “Commodity Modernization Act of 2000“ allows ICE Futures to trade energy futures without disclosure to CFTC in the U.S. market through London. So, in fact, it has deregulated and taken away from any government supervisory role the entire trade in energy futures, especially oil.
Tags: New World Order