Hedge funds and foreign currency exchange traders are betting record amounts against the USD. If you were worried about $5.00 gasoline, don’t bother, worry about having anything to eat. Of course it could be just a tempest in a tea pot in order make a few billion for the big money people. Make no mistake, this is a manmade crisis, but every time they do this scam they run the risk of it getting completely out of hand.
If you happen to bear the brunt of one of these little forays into free market capitalism the starvation is very real. Already one in five Americans qualifies for food stamps and the system is not that generous, many more are having a hard time with real food security let alone any have any realistic hope of achieving the American Dream.
There are 400 million gallons of gasoline used in the US on a daily basis. Just a 50 cent hike in price translates into 200 million USD per day consumer “tax” that is paid to the rich just as if they were feudal lords. You won’t see any tea baggers protesting this “tax“, they are funded by the Koch brothers who get a big chunk of the proceeds.
If these billions aren’t enough, the Wall Street banks have another scam to play off of this “crisis”. They sell derivatives, a derivative amounts to a short term insurance policy against price swings. They sell them to companies at risk from prices going up for all manner of things that are bought and sold, not just fuel. They also cover the risk of buying at current prices and being stuck when the market collapses. Pension funds buy them to try to protect themselves which comes out of your retirement. The big money is selling them to hedge funds that are just placing bets.
It’s sort of like setting the town on fire and then selling insurance, but not just to the people at risk of losing their homes but selling them to people in the next town who are betting that somebody else’s house will burn. This is what brought down the world economy in 2008 and not mortgaging too many houses for brown people. This bubble is conceivably bigger than the 2008 bubble since the same players are still at it (thanks to 14 trillion in bailouts) and they are even bigger than when they were declared “too big to fail” by the Bush Adm.
The cost of buying “protection” is passed along to the consumer in higher prices besides the actual rise in energy costs. That is if your company can do that, some can’t as they are already being pinched by the weak economy and that will only get worse as this crisis deepens. More failed businesses, more jobs lost, this makes things worse for other companies as consumers lose jobs or have their pay cut (there’s a crisis, don’t you know). This is how you get a economic death spiral going and the Republicans who are trying to break the unions, cut the safety nets and drive down wages know full well.
The one thing you must remember is that this “crisis” is not real but they are trying to make it real. America is not broke like the rich keep saying, they just want you to accept you are broke while they have it all. www.prairie2.com