Guest Post: Goldman’s Global Oil Scam Passes the 50 Madoff Mark

Tyler Durden's picture

Submitted by Phil at Phil's Stock World

$2.5 Trillion - That’s the size of of the global oil scam.

It’s a number so large that, to put it in perspective, we will now begin measuring the damage done to the global economy in "Madoff Units" ($50Bn rip-offs).  That’s right - $2.5Tn is 50 TIMES the amount of money that Bernie Madoff scammed from investors in his lifetime, yet it is also LESS than the MONTHLY EXCESS price the global population is being manipulated into paying for a barrel of oil.

Where is the outrage?  Where are the investigations?

Goldman Sachs, Morgan Stanley, BP, TOT, Shell, DB and Societe General founded the Intercontinental Exchange in 2000.  ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws.  The exchange was set up to facilitate "dark pool" trading in the commodities markets.  Billions of dollars are being placed on oil futures contracts at the ICE and the beauty of this scam is that they NEVER take delivery, per se.  They just ratchet up the price with leveraged speculation using your TARP money. This year alone they ratcheted up the global cost of oil from $40 to $80 per barrel.

A Congressional investigation into energy trading in 2003 discovered that ICE was being used to facilitate "round-trip" trades.  Round-trip” trades occur when one firm sells energy to another and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company.  This is nothing more than a massive fraud, pure and simple.

"Traders of the the ICE core membership (GS, MS, BP, DB, RDS.A, GLE & TOT) wouldn’t really have to put much money at risk by their standards in order to move or support the global market price via the BFOE market. Indeed the evolution of the Brent market has been a response to declining production and the fact that traders could not resist manipulating the market by buying up contracts and “squeezing” those who had sold oil they did not have. The fewer cargoes produced, the easier the underlying market is to manipulate." - Chris Cook, Former Director of the International Petroleum Exchange, which was bought by ICE.

How widespread are “round-trip’‘ trades? The Congressional Research Service looked at trading patterns in the energy sector and this is what they reported: This pattern of trading suggests a market environment in which a significant volume of fictitious trading could have taken place. Yet since most of the trading is unregulated by the Government, we have only a slim idea of the illusion being perpetrated in the energy sector.

DMS Energy, when investigated by Congress, admitted that 80 percent of its trades in 2001 were “round-trip” trades.   That means 80 percent of all of their trades that year were bogus trades where no commodity changed hands, and yet the balance sheets reflect added revenue.  Remember, these trades are sham deals where nothing was exchanged.  Duke Energy disclosed that $1.1 billion worth of trades were “round-trip” since 1999. Roughly two-thirds of these were done on the InterContinental Exchange; that is, the online, nonregulated, nonaudited, nonoversight for manipulation and fraud entity run by banks in this country. That means thousands of subscribers would see false pricing. Under investigation, a lawyer for J.P. Morgan Chase admitted the bank engineered a series of “round-trip” trades with Enron.  

You can chart the damage done by Goldman Sachs and their gang of thieves by by looking at commodity pricing pre and post ICE.  Before ICE, commodities followed a more or less normal growth path that matched global GDP and was always limited in price appreciation by the fact that, ultimately, someone had to take delivery of a physical commodity at a set price.

ICE threw that concept out the window and turned commodity trading into a speculative casino game where pricing was notional and contracts could be sold by people who never produced a thing, to people who didn’t need the things that were not produced.  And in just 5 years after commencing operations, Goldman Sachs and their partners managed to TRIPLE the price of commodities.

Goldman Sachs Commodity Index funds accounted for $60Bn out of $100Bn of all formula-managed funds in 2007 and investors in the GSCI lost 15% in 2006 while Goldman had a record year.  John Dizard, of the Financial Times calls this process "date rape" by Goldman Sachs as the funds index rolls cost investors 150 basis points of return annually ($9Bn on the Goldman funds) but GS, under the prospectus, is able to "manage our corresponding position," which means that it has to deliver a price at the end of the roll period. If Goldman can cover that obligation at a better price, they will, and GS pockets the difference.  This is why we see such wild moves in the day’s before rollover, there are Billions riding on GS hitting their target every month…

It is not surprising that a commodity scam would be the cornerstone of Goldman Sach’s strategy.  CEO Lloyd Blankfein, rose to the top through Goldman’s commodity trading arm J Aron, starting his career at J Aron before Goldman Sachs bought them over 25 years ago. With his colleague Gary Cohn, Blankfein oversaw the key energy trading portfolio.  According to Chris Cook:  "It appears clear that BP and Goldman Sachs have been working collaboratively – at least at a strategic level - for maybe 15 years now. Their trading strategy has evolved over time as the global market has developed and become ever more financialised. Moreover, they have been well placed to steer the development of the key global energy market trading platform, and the legal and regulatory framework within which it operates."  According to Cook:

It appears to me that what has been occurring in the oil market may have been that – through the intermediation of the likes of J Aron in the Brent complex – long term funds have been lending money to producers – effectively interest-free - and in return the producers have been lending oil to the funds. This works well for as long as funds flow into the market, or do not withdraw in quantity, but once funds withdraw money from the market, there is a sudden collapse in price.

A combination of market hype, the opacity of the Brent Complex and the relatively small scale of trading of the benchmark BFOE crude oil contract enabled the long run up in prices, and several observers believe that the dramatic spike to $147.00 per barrel was the specific outcome of the collapse of SemGroup, which that company’s management subsequently blamed mainly on Goldman Sachs.

Mike Riess issued a study of "Modern Market Manipulation" in which he describes how GS, MS, DB et al have systematically created an environment that rewards those who manipulate the system, robbing the poor to send the money up they company ladder in exchange for record bonus payouts, which (by design) are the majority of their traders’ salaries:

Before the ‘80’s, there were just us traders. "Rogue" traders arrived on the scene with the large institutional participants, both private and public. Today’s companies and government marketing boards are large enough for senior management to distance itself from controversy, including market manipulation.

In a competitive, amoral environment, middle managers in these mega-organizations have the authority to hijack an institution’s reputation and the financial clout to manipulate the market—and they do. As long as they succeed, they enjoy promotions and perks and, sometimes, the fruits of embezzlement. If the manipulation unravels, the company denies any knowledge and hangs the rogue out to dry. We’ve seen this over and over again, most recently with D’Avila and Codelco, Hamanaka and Sumitomo, Leeson and Barings and Tsuda and Daiwa Bank.

The CFTC’s definition of manipulation is:

A planned operation that causes or maintains an artificial price

Unusually large purchases or sales in a short period of time in order to distort prices

Putting out false information in order to distort prices.

In mid-2008 it was estimated that some $260 billion was invested in the Brent energy markets on the ICE while the value of the oil actually coming out of the North Sea each month, at maybe $4 to $5 billion at most.  NYMEX trading follows a similar path with 258,000, 1,000-barrel contracts open for December delivery (258M barrels), which were traded 327,000 times yesterday alone yet, at the end of the period, less than 40M barrels of oil will actually be delivered as that is the total capacity at Cushing, OK - where NYMEX contract deliveries are settled.  Every single one of those traders know it is not even possible for 80% of the contracts they are trading to be fulfilled - its a joke, but the joke is on YOU!

Over the course of an average month at the NYMEX, 5 BILLION barrels of oil will be traded, with a fee being collected on every single transaction which is ultimately passed down to US consumers, yet less than 40M barrels will actually be delivered.  That is just 8 tenths of 1 percent of actual demand for the product that is being traded - 99.2% of the oil transaction fees being paid by the American people do nothing more than create fees for the traders and record profits and bonuses for the trading firms!

Index Speculators have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years.  Today, in many commodities futures markets, they are the single largest force.  The huge growth in their demand has gone virtually undetected by classically-trained economists who almost never analyze demand in futures markets.  As money pours into the markets, two things happen concurrently: the markets expand and prices rise. One particularly troubling aspect of Index Speculator demand is that it actually increases the more prices increase. This explains the accelerating rate at which commodity futures prices (and actual commodity prices) are increasing.

Before ICE, the average American family spent 7% of their income on food and fuel.  Last year, that number topped 20%.  That’s 13% of the incomes of every man, woman and child in the United States of America, over $1Tn EVERY SINGLE YEAR, stolen through market manipulation.  On a global scale, that number is over $4Tn per year - 80 Madoffs!  Why is there no outrage, why are there no investingations.  Well the answer is the same - $4Tn per year buys you a lot of political clout, it pays to have politicians all over the world look the other way while GS and their merry men rob from the poor and give to the rich on such a vast scale that it’s hard to grasp the damage they have done and continue to do to the global economy.

CIBC Chief Economist, Jeff Rubin issued a report last year that blames the current recession on high oil prices, saying defaulting mortgages are only a symptom.  According to Rubin, these higher oil prices caused Japan and the Eurozone to enter into a recession even before the most recent financial problems hit. Higher oil prices started four of the last five world recessions; we shouldn’t be too surprised if they started this one also:

Oil shocks create global recessions by transferring billions of dollars of income from economies where consumers spend every cent they have, and then some, to economies that sport the highest savings rates in the world.  While those petro-dollars may get recycled back to Wall Street by sovereign wealth fund investments, they don’t all get recycled back into world demand. The leakage, as income is transferred to countries with savings rates as high as 50%, is what makes this income transfer far from demand neutral.

There is NO shortage of oil.  OPEC alone has 6-7 Million barrels a day of spare capacity, more than the total disruption of any single country and any two countries other than Saudi Arabia could offset.  Additionaly ICE partners Total and JPM are part of the cartel that is totally skewing the global demand picture by storing 125M barrels of oil in offshore tankers.  That’s 15 days of US imports that have been "ordered" but never delivered so they show up as an extra 1Mbd of global demand, even though nobody actually wants them.  Land-based storage is also bursting at the seems, with global supplies up to 61 days of total consumption (84Mbd) up from 52 days last year.

That’s 5 BILLION barrels of oil already out of the ground, in barrels and ready to go AND THEY KEEP MAKING 86M MORE EVERY DAY!!!  Where is the shortage?  Mainly, it is media hype pushed by "analysts" at the very firms that profit the most from high oil prices.  Goldman Sachs issues bullish opinions on oil and builds large positions in oil, while it is the cartel’s job to hide oil in off shore tankers, and then sell forward all the oil, with futures contracts, locking in the high price.  Of course they have their media hounds as well, most notably the Drudge Report.  As noted by Goldmansachsrules:

Type in the word "OIL" inside the "Drudge Report" search engine. It returns 1,965 headlines with the word "OIL." Over the last couple years, The Drudge Report has ran 1,965 headlines with the word "OIL." Most of these articles were hosted by the worthless organizations of Yahoo, Breibart, APNews, and Reuters. The Drudge Report just creates the headline, and links it the article hosted by who ever is doing the "hyping."

Search on the word "credit crisis" and you only get 12 archived headlines. The word "bailout" yields only 268. The word "bank" returns only 568. So you have the Drudge Report hyping the oil market, because they bring it up almost 2,000 times. Unlike the "credit crisis" or "Wall Street Bailout" that actual did happen, the oil market and what did/didn’t happen between Israel/Iran is plugged 10 times more!

Of all the 1,965 articles that the Drudge Report ran with the word "OIL" in the title, most were hyping the oil market. The most notorious cases, a few times a week, were hosted by Yahoo, Breibart, and AP News. Most of these articles were plugged with the same paragraph that stated if "Israel were to attack Iran, Iran would retaliate by taking over the straits of Hormuz, the largest pathway for oil and we all know what that would do to the price of oil.

It truly takes a global village of manipulators and their lackeys to pull off a con on the scale of oil but it’s also the most profitable scam ever perpetrated on the people of this planet as they take control of a vital resource and then create artificial shortages and drive speculative demand in order to charge you an extra dollar per gallon of gas.  You don’t complain because it’s "only" $15-$20 every time you fill up your tank, but that’s what they count on and that’s where you’re wrong - it’s $20 from you and $20 from EVERY SINGLE ONE of your customers once or twice a week and $20 more dollars your employees need just to get to work.  It’s money that could be going into your business instead of a new gold bathtub for a Saudi Prince or a Goldman trader.

Global drivers consume 1.7Bn gallons of gas every single day, that $1 is $50Bn a month, a Madoff per month that is being taken away from YOU and YOUR business and the non-energy/financial businesses you invest in.  Of course we can give up and invest in those sectors (we do) but that doesn’t do much for the global economy and, even as you sit here now, not doing anything, those oil and profits have been plowed into the copper and gold markets and now the same Goldman energy cartel is bidding to take over you clean air (through Carbon Credit trading) and your clean water.

Maybe when they are charging you $80 a gallon for water and ten cents a breath you’ll want to do something about it.  I think I’ll start right now and you can too!  Here is the Email address and Fax numbers for all of yor Senators, Congresspeople and Governors.  Send this article to them and let them know you’d like to see an investigation.  Take a few minutes of your time to save a few bucks on your next gallon of water!

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John Self's picture

I'm not sure it's correct to say ICE is outside of the reach of U.S. laws.  While it's true that it started out overseas -- in London, I think -- it now has a significant presence in the Atlanta area and I believe is now within CFTC jurisdiction.  Both ICE and NYMEX have been actively involved (read:  lobbying) with the development of the new derivatives regimes.

Shiznit Diggity's picture

The squid is doing the world a favor by jacking up the price of oil. Peak oil is imminent if not already upon us. We need to get our arses in gear and deal with it. In this case, Lloyd is right about the squid doing the Lord's work.

Anonymous's picture

Peak Oil is imminent?? You're kidding, right?

Assetman's picture

We had a similar condition developing with natural gas less than 10 years ago in the North American market.  Because of technology developments in exploitation (specifically in shale formations), we now have what is estimated to be an 80 year supply.

If exploration and exploitation techniques in the drilling business evolve as one would expect, we will eventually run into reservoirs that we thought never existed.  Case in point is offshore Brazil.  Antartica might well be another.

Anonymous's picture

Faith in technological progress is quite risky business. Remember the projections for flying cars in the '50s? Fusion power is just 20 years away, right? The cure for cancer is in sight?

The question is not whether the oil is there, it's whether or not it can be economically extracted, both in monetary and energy terms. Offshore is risky and capital-intensive, not something you wanna count on for the master-resource of the global economy.

Environmental effects from non-traditional sources are also an issue, as evidenced by the Niger Delta and the Alberta Tar Sands. How much are we willing to pollute in order to maintain a declining status-quo?

I'm sure the ancient Maya thought they could endlessly clear the forest for increased food production, until they depleted the soil and their civilization collapsed. I'm not a proponent of the Dieoff worldview, but it illustrates the point that just because we can doesn't mean we should.

For an alternative perspective on shale gas reserve estimates, read some stuff by Arthur Berman. The fact that he was recently silenced by the industry should send up red flags.

Shiznit Diggity's picture

Many believe so, myself included. Some disagree. Time will tell who is right, but even if peak oil is a couple of decades away as the IEA projects, it's better to start preparing sooner rather than later.

TumblingDice's picture

Peak oil already happend dude. The survival of our species is at stake. Think for yourself. Even if the manipulators are perpetuating this theory that doesn't make it false. A broken clock is right twice a day and this time it certainly is. Efficiency is going down, as well as production now. It will be an exponential decline is harvested energy.

Anonymous's picture

Dude, PO is soooo...2005.

Anonymous's picture

The 1973 oil crisis was about "peak oil". So was the 1980 oil crisis. Same hysteria. It's bullshit now just like then.

Anonymous's picture

Well, technically the early '70s was the peak of Continental US production, so I'm not sure your evidence supports your point.

Hysteria overblown? Yes. Peak Oil bullshit? Not on your life.

Anonymous's picture


Anonymous's picture

It wasn't dinosaurs that died, it was massive ancient forests and swamps.
Also, why are you screaming? Are we supposed to take you seriously because you can push caps-lock?

aint no fortunate son's picture

Why don't we cut out the middle man and just send our tax returns and payments to Goldman? Really, in the long run it would be so much simpler. And Jamie Dimon can get the sales taxes on gasoline, heating oil, diesel, aviation and marine fuel, nat gas. 

rigger mortice's picture

'Why don't we cut out the middle man and just send our tax returns and payments to Goldman? Really, in the long run it would be so much simpler.#'



max2205's picture

The Government rally seems weak in the knees now that there is talk of using the $800 B in TARP monies to pay down the deficit, what, sell out of stocks and pay off the deficit, GS must be pissed.

lizzy36's picture

And because all former squid CEO's have 9 lives, Corzine in the running for CEO at BAC.

Careless Whisper's picture

that's so he can destroy one more of the squid's competitors.

SDRII's picture

It's the new American way: reward the losers

deadhead's picture

in some ways I hope you are correct Lizzy. It would be the ultimate jump the shark for the wall st, banking, fed, treasury complex.

i'm looking forward to when that group gives the order to invade your fine country, expropriate the oil and all your maple leafs.



Anonymous's picture

How else are GS going to make their $100 million a day profit ?

Anonymous's picture

I can't wait for carbon trading to begin

Anonymous's picture

"The exchange was set up to facilitate "dark pool" trading in the commodities markets."

wow. i'm speechless. this might be a single most idiotic sentence i've seen this year. c'mon ZH, tighten up your ship.

mberry8870's picture

Agreed, A tad bit of hyperbole in order to display a pedestrian understanding of the issue.

Sqworl's picture

Revolving door...loser goodie bag from government.

A Man without Qualities's picture

"They just ratchet up the price with leveraged speculation using your TARP money. This year alone they ratcheted up the global cost of oil from $40 to $80 per barrel."

This is the ranting of a madman....

Anonymous's picture

Not to worry there are pledges and comitments

Aug. 25 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke, named today to a second term as central bank chief, pledged to work toward restoring stability to financial markets and the economy.

“I will work to the utmost of my abilities” to help “provide a solid foundation for growth and prosperity in an environment of price stability,” Bernanke said today in a Martha’s Vineyard, Massachusetts,

curbyourrisk's picture

No justice til Goldman trades at ZERO.

Gimp's picture

Rome is totally bought and paid for, such a shame.

Anonymous's picture

Praise the Lloyd!

Yossarian's picture

So, if this is a Ponzi the question becomes when does it end?  It seems there are only two ways: a collapse in spot caused by a large decline in demand at a time when storage is limited; or the inability of the financial players to keep funneling capital (wrong word, maybe just dollars) into the futures markets.  With China stimulus encouraging more VLCC's and The Fed intent on supplying GS/JPM/MS with unlimited amounts of free dollars, it seems like this can go on for quite a while, at least until the gold-bug fiat collapse comes about.  And when that happens at least they will have all of the oil/gold/copper/fertilizer/food/lumber/land to continue extorting the masses.  Or maybe- just maybe- we will turn off American Idol, CNBC, and MSNBC (besides Dylan Ratigan) and force a change.  Ron Paul we NEED you. 

steve from virginia's picture

Uh ... 'Round trips' (or check kiting as Chris Martenson calls it) are found in all markets. It's a good way to pump up velocity as well as a balance- sheet steroid. As for the derivatives created; at some point they would be converted to cash provided there is sufficient cash.

Conversion to cash (or cashing out or rats abandoning the sinking ship) is behind the market/stimulus dynamic of today. From that viewpoint, ICE serves to keep the ordinary futures/cash markets stable, the better to facilitate cashing out.

Look at today's markets and see if you come to a similar conclusion. If you do, best to close out any dollar- short positions.


Yossarian's picture

Can you please expand on this for the layman- thx.

ShankyS's picture

Glad you picked this one up. Nice post Phil.

Anonymous's picture

I hear that once Cap and Tax passes, there will be a 10 cent fee for each breath.

The money will go to Goldman Sachs and to the Obama Administration to pay for Stimulus Plans number 2, 3, 4, and 5.

Anonymous's picture

ok so if big oil controls the price of oil, why did they let it collapse last year?

Also, are they ratcheting up the price of the metals too? the euro? sugar ratcheting maybe?

One Eyed King's picture

It wasn't just oil that collapsed last year. The whole worlds economy slipped into reality for a bit. I would suggest you focus on the numbers & not debunking the 'crazy conspiracy theorist's' and you might broaden your knowledge of the issue.

Anonymous's picture

This will end when the price of oil drives many companies out of business. The unemployment roll is the big equalizer. 2010 is going to bear a bust companies going out of business will not pay rent CRE will drop further. More unemployment more people not paying the mortgage or rent. Fannie Mae renting to past homeowners competes directly with apartment owners less rent.
Goldman Sachs is smart at making money will they be smart enough to keep the game going. Different set of skills with a 12% unemployment rate, Goldman sponsored soup kitchens? Empty buildings turned into homeless shelters ala Goldman, doubt it.
The Government has yet to realize that they are the problem. Goldman Sachs is just a bedpartner of the status quo which will change, what we cannot predict is the damage when it changes.
You can offer 1.2Million people loan mods but how many of those people are going to be resourceful enough to complete the paperwork without someone holding their hand. Think about all the free tax filing services and still people are lax with paperwork.
Human beings will do what is best for them, avoid paperwork, make promises and move out whenever you have a better situation.

Anonymous's picture

Nymex has swaps too, called WS. They are the exact same thing with same position limits. You can not move a physical market if there are no real buyer at the end of the day. Ever hear of basis? Come on man.

Yossarian's picture

But aren't we essentially captive buyers in the short-term (LT economies adjust their behavior to a higher price) and the marginal reduction in demand from the real economy is made up for with stored crude.  Eventually that crude needs to find a buyr but if you're GS/JPM sitting on a lot of crude would you dump it on the market or create a new collateralized asset class composed of oil assets that you can dump to pension funds, sovereign wealth, etc.?  

bugs_'s picture

Love the new "madoff" unit.  How big is social security in madoffs?

Anonymous's picture

3Com Option Trades May Have Been More Than ‘Luck’

"Goldman Sachs Group Inc. advised 3Com on the transaction, while Morgan Stanley helped Hewlett-Packard, according to"

Ha, if I could be as "lucky" as Goldman

Gunther's picture

The tone of the article is a bit misleading.

During most of the run-up in the price of oil there was almost no spare capacity; ALL producers were pumping flat out. Right now there is some spare capacity and the price came down. Without a tight physical market a purely financial manipulation can not work.
Right now there is no shortage, but during the run-up there was!
The storage of oil on tankers is some 1.5 world production days, not that impressive.
EIA supplies storage data in for the US. The low was  at September 10, 2004 at 17.2 days supply and the high in Feb '83 at 34.2 days supply.

adinfinite's picture

why are people still acting like this is news? Its amazing how we all see the thing right there on our screens, in numbers, and our common sense tells us whats going on but we say or do nothing. Then some guy writes about it ( although replete with inaccuracies) and we all express horror? LOL. Trade. Take care of your families. 

Anonymous's picture

As per Diggity's comment "The squid is doing the world a favor by jacking up the price of oil. Peak oil is imminent if not already upon us." I disagree. I understand what he's saying, and I agree that replacing oil is ultimately advantageous, but any long-term benefit of price manipulation is incidental and, more importantly, unreliable.

First, the manipulation is likely to whipsaw prices to squeeze money from the market without regard to ecology or efficiency and with the ultimate goal of crippling, or at least exsanguinating, the all players.

And second, I'm no longer convinced that "peak oil" is the issue in the larger context. Rather, the issue is energy and there may well be viable and ecological alternatives. The question is how to incentivize their development, and for that it would seem that the freest possible market would be the best approach.

By "free market" I mean free not only to trade and to price, but also fee in the sense of free to make accurate long term projections which requires a free press, transparent accounting, and fungible assets (so as to support low cost reallocation). In short, free in the larger "free capitalist market" sense.

It is bad to argue that price manipulation is good. It is an argument that would warm the cockles of GS's ice heart.

Anonymous's picture

"Without a tight physical market a purely financial manipulation can not work. " ------- It works best if you can spread rumors about attacks on Iran. However, that does not mean that it still works demand plummets like it is has now. Compare for instance, the price action in the Baltic Dry Index as compared to the action in oil.

Also, Phil fails to mention the USO put. USO publishes when they will purchase oil every month, so you can drive up the price into their purchases.

This way the USO, the way that pensioners, grandmothers, average joe, and unions invest in oil, is the ultimate bag holder for the traders.

You might say that the whole scheme is a tax on oil that goes to Wall Street instead of a tax that goes to the US gov't. Golly it'd be good to collect a tax on oil!!!

Anonymous's picture

too much money/credit chasing too few goods/contracts. Sound familiar? Lots of bored traderss with lots of cash sloshing around the globe. Give a guy a cheap computer, hook him up to the internet. give him lots of govt guaranteed doe and whoppee!! Hell of a lot easier than working construction. restrict credit and increase the price of credit, problem solved.

Blues for Dante's picture

Wait until they figure out how to manipulate the "clean & usable" global water supply, then were all f*@ked. Instead of trading millions of barrels of oil, they'll be trading billions of gallons of water. And you can't just consume less water, or switch to a different resource. Once control over supply and distribution of water is handed over to the private sector, this process can begin. 

Bottled water is currently a $12 billion industry in the US alone. TWELVE BILLION DOLLARS! On bottled water! And that's a tiny fraction of total consumption. I know people who refuse to drink tap water... and some of them are not what I would call well-off. If people are dumb enough to pay for a free resource, then surely they can be gamed into believing water price fluctuation is due to a supply issue. There's a lot of money waiting to be made.