It is with great interest that I read this past week about the President's initial response to rising gas prices. What or who was to blame? According to the President...speculators. Nameless, faceless speculators. They are to blame for the rising price of crude oil up and the accompanying price at the pump!
"The problem is...speculators and people make various bets, and they say, you know what, we think that maybe there's a 20 percent chance that something might happen in the Middle East that might disrupt oil supply, so we're going to bet that oil is going to go up real high. And that spikes up prices significantly."
Now this interested me because I worked in the petroleum industry and I studied energy law at law school, and I have taken a strong interest in macroeconomics in recent years. (I read Market Ticker and Zero Hedge, if you are wondering.) I'm going to disregard for this note the fact that higher gas prices are not objectionable at all to our President, despite the fact that they are connected to every product we buy. He doesn't have a problem with high gas prices, only wishing that they become high on a gradual basis. I'm also going to ignore the moratorium on drilling in the Gulf and general opposition to domestic exploration and production of petroleum by this Administration.
No, the main culprit here isn't the nameless, faceless "speculators" that are now the object of the President's scorn, but government policy itself, both with the Federal Reserve (monetary) and the budget deficits accrued in recent years (fiscal). What is going on is that the government is trying to deflect blame to these nameless, faceless speculators for their own disastrous fiscal and monetary policies.