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Attack the Speculators

April 22, 2011

Now that the likes of McDonalds and Walmart are screaming about inflation the public is starting to catch on. Doing their best to get in front of this thing, the governments are now out to attack the “speculators” for driving up the prices of commodities. See Obama probing oil fraud, and Greece having interpol interview a trader from London about an email he sent predicting a debt collapse. The Amaranth trader that reaped all sorts of having a few years ago just got hit with a $30mm fine, too.

Its clear now that the politicians need someone to point the finger at here, and its going to be “speculators”. They wont attack Wall st directly, only certain individuals a la Jerome Kerviel aka “rogue trader”. (sidebar: If I send an email with a word like “guarantee” or “definitely” in it I get a call from compliance. You are telling me they bank doesn’t know where the money is going?) The general public will be happy with this whole witch hunt as traders are rich evil people and will offer a complete scapegoat for Obama.

I actually agree with much of this fact that speculation is driving up the prices of a lot of these commodities, just take WTI for example (The price keeps rising even though there is no more storage space).

But why is so much speculation taking place? Do traders just buy oil because everyone else is? Well, yes, to some extent. But how about the fact that the US dollar is down 10-15% this year, and the “UN” has launched a massive war in the middle east? Obama would also never go to the exchanges where all these useless oil contracts trade and have them seriously boost margin requirements and/or eliminate leverage. See – he just wants a scapegoat not actually a fix for the problem.

Lets take silver for example. Its pretty clear that JPM just sells silver contracts short even though they dont have a “borrow”. Silver contracts are supposed to be backed by actual silver sitting in a vault, but JPM trades these contracts that they don’t have physical for. So who is Obama going to attack for this? At some point he is going to address the gold and silver market and I will GUARANTEE you that JPM isn’t the one getting the stewards inquiry. Itll be guys like Bernard von NotHaus who is going to jail for “treason” for selling silver coins.

The politicians and corporate oligarchy are corrupt and are destroying our economy while robbing us blind. They then create an enemy for the general public to hate, and throw the book at him. The general public celebrates “Oh yes get those bastards!” meanwhile the corporatocracy keeps right on with what they are doing.

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