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. India has already suspended futures trading of five commodities.
According to a Telegraph.co.uk article by Ambrose Evans-Pritchard, Germany and India have engaged in a vital, world leading position against commodities trading.
Why is this development vital and ground-breaking?
The article has diverse political entities responding to a doubling of oil prices over the past year:
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.
Oil has doubled in price over the past year and the concerns are echoed on Washington’s Capitol Hill where irate Democrats want rules compelling traders to take delivery of crude oil, a move which would paralyse the market.
The regrettable thing is that a principle is not recognized until “trading” results in millions starving until the food they produce fetches the required unearned profit from them, or artificial escalation of fuel prices drive us to the brink of bankruptcy.
The facts however are simple:
- On the one hand, the world is subject to imposed monetary systems which multiply debt in proportion to possible means to service debt, so much as we are forced to maintain vital circulations by re-borrowing principal and interest obligations as an ever escalating sum of debt.
- On the other hand, we have “commodities traders” finding the most extreme excesses of unearned profit imaginable, which from the finite profit reaped from anything, leaves all the less to be realized by those who deserve just profit from their work.
Rather than solve the problem by eradicating unearned profit, the cited Democrats are asking only to place hurdles in front of most extreme and broadly damaging cases. But if those are unjust, why not eliminate all the injustices by outlawing the crime afflicting us everywhere? Is the crime only a crime in the most extreme cases?
No. It is the same crime in every case. Is stealing not a crime if we do it once, but only if we do it 50 times over, or against everyone so much that we engender “economic” failure, or the starvation of millions?