Back in 2008, Democrat Congresswoman Maxine Waters threatened to nationalize the oil industry, just as Hugo Chavez has done in Venezuela:
View on YouTube
This week, Obama went one step closer to making that Marxist dream a reality.
President Obama on Tuesday urged Congress to help strengthen federal supervision of international oil markets, amid pressure from U.S. voters to take action on rising gasoline prices.
The president wants Congress to increase penalties for market manipulation and empower regulators to increase the amount of money energy traders are required to put behind their transactions. Â […]
Many Democrats blame speculators for the high cost of gasoline. They would not go as far as to say that market manipulation is responsible for rising gas prices, but the officials said they wanted to curtail the ability of speculators to take unlawful advantage of oil price volatility.
At issue is the increasing role of investment in oil futures contracts by pension funds, mutual funds, hedge funds, exchange traded funds and other investors. Much of that money is betting that oil prices will rise. Analysts say it is possible that such speculation has somewhat inflated the price of oil.
At the same time, investors can also bet that prices will go down — indeed, speculators have been credited for low natural gas prices. Studies of the effects of speculation on oil markets indicate that it probably increases volatility, but doesn’t have a major effect on average prices.
David Sheppard at Reuters warns that Obama’s plan could increase volatility in the market, driving prices even higher:
U.S. President Barack Obama’s bid to dampen the influence of oil speculators by having regulators set trading margins could backfire, potentially making prices even more volatile and leaving crude dominated only by those with the deepest pockets.
Under Obama’s request to Congress, the Commodity Futures Trading Commission (CFTC) would determine how much speculators need to pay to trade U.S. crude oil futures, in theory increasing the amount when prices move too far, too fast.
But economists and traders cautioned that pushing smaller investors out of markets would only hand greater influence to the largest hedge funds and Wall Street banks. Ultimately, there may not be enough traders left to do business with oil producers and consumers looking to hedge their needs.
“Reduced liquidity often means greater volatility,” said broker Jay Levine at Enerjay LLC in Maine.
“That’s the exact opposite of (Obama’s plan’s) purpose”.
Exchange-operator CME Group, which currently sets margin requirements for the benchmark U.S. crude oil contract, on Tuesday called the president’s plan “misplaced”, and said speculation should not be confused market manipulation.
As a true Alinsky disciple,Â Obama’s specialty is to create a crisis through government policies, blame the private sector for the results, and then take further government control of the industry. Â Lather, rinse, repeat.