Off-Topic: Gasoline Prices and Market Manipulation
Most of us "want" to believe that the price we must pay for
commodity items like gasoline - is somehow "above politics" and
cannot be easily manipulated; especially to influence the outcome
of what looks to be - in three weeks - very close mid-term
elections in the USA.
Therefore, when the price of gasoline recently dropped
substantially, only a few dyed-in-the-wool cynics made that
particular connection. Personally, I did not see a political nexus
then; but OTOH I'm proud to be labeled as a non-partisan political
cynic, as the whole process stinks, including BOTH parties. Our
system is often little more than a Pac-man PAC-sham which is run
by "special interests" usually Petro-interests, and that will not
change much, even if control of Congress does. There will be a
liberal version of Jack Abramoff which emerges to fill that void
and he will be distributing the same petrodollars for votes, just
to a different constituency:
http://en.wikipedia.org/wiki/Jack_Abramoff
Even this cynic could not imagine that the price of gasoline could
be manipulated that quickly and by that much - given that the
price of OPEC crude [which is out of our control as many prior
shortages have demonstrated] which only recently has gone down by
a lesser percentage --- nor -- that the price of gasoline could
change the outcome of even close re-election races. Even if the
electorate "votes their pocketbook" - does the cost of gasoline
matter that much?
The stakes are extremely high. More so than you might imagine.
Some of Nancy Pelosi's supporters claim that if the Democrats win,
Bush will be impeached and possibly even put on trial in Hague for
war crimes. Apparently charges have been secretly drawn up. You
could say therefore, that the stakes *could not be higher* for the
President and his inner clique, including Cheney and Rummy.
However, I would not want to get into a poker game against that
threesome. Even using Pelosi's chips.
BTW the wholesale price of gasoline last week - in the USA - get
this: it is less on the futures market (per gallon), then is the
equivalent price of the crude oil it from which it is derived!
Plus OPEC has stated that the recent smaller drop in crude oil
prices actually began with the drop in gasoline prices in the
USA -- and NOT THE OTHER WAY AROUND. This is a reversed
cause-and-effect situation which would have been expected in a
normal free market dynamics. So what could be going on ?
The futures market - by and large - determines the pump price in
the USA for gasoline, as all the US production is totally
pre-bought (an Enron legacy) ... and that futures market is
controlled, ultimately, by a single NYC investment firm called
Goldman Sachs (GS). This particular banking firm has long been a
"suits" company with suspiciously close ties to both the CIA and
Mossad - and to both political parties, not just the Republicans.
It is the Halliburton of Banking. In a few words GS is the most
profitable and successful investment firm in the world - is no
longer under Jewish control, if it ever was, and is the most
"connected" bank around at high levels... and supposedly [what
they do not want to publicize] : the biggest tax cheat in the
banking world - done by hiding trading profits overseas,
especially in Asia and then to Europe in a petrodollar recycling
scheme.
After 9/11, when two of GS's banking competitors were nearly wiped
out by the tragedy, reports appeared on the net, along with a
scanned copy of an Goldman Sachs internal memo, said to be a
smoking-gun of inner circle "fore-knowledge" of the event. It was
a memo sent around but not in hard copy form except to only to a
few overseas offices: dated on September 10, and it is advising
all employees of a possible terrorist attack. It recommended all
employees avoid any American government buildings. It was supposed
to be read and destroyed. Yes - WTC 6 is/was not exactly a
"government building" per se, but more on that later...
The PR firm handling the GS account has countered these rumors and
"conspiracy theory" reports in general - with the disdainful reply
that the purported memo (which they did not deny) referred only to
government buildings, and apparently only to such buildings in
Japan, not to "the Street". Huh? How many US government building
do we have in Japan? Anyway, critics have been trying every since
to determine if Goldman Sachs distributed other electronic memos,
closer to home, which have not come to light. They apparently have
an internal computer system which wipes all computers of a certain
type of internal email. You can check for yourself on how they
fared in 9/11.
Anyway... enough pandering to conspiracy nuts. Here are some hard
facts.
Back in July, nobody thought much about the fact that President
Bush had nominated Henry M. Paulson, Jr. to be the 74th Secretary
of the Treasury. Quick confirmation. This was just another in a
long line of candidates picked from the ranks of GS for high
office especially at Treasury.
Yes, Paulson had been the recent Chairman and Chief Executive
Officer of Goldman Sachs. At the time, a couple of months ago,
this did not raise eyebrows except for the fact that Goldman had
been aggressively stacking the commodities futures market to
reflect its long-position outlook on gasoline- and was partly
responsible for $3+ gallon run-up in fuel price during the summer
driving season.
Some cynics may have thought that Bush was effectively promoting
Paulson to take over Treasury, and that this job may have been a
"payback" from the Bush oil connections - for a job well-done in
the previous round of gasoline price manipulation. He received an
enormous compensation package on leaving GS - so the tiny
government paycheck was not an issue - with a quarter billion in
the bank.
BTW - Paulson's three immediate predecessors as CEO of Goldman
Sachs: Jon Corzine, Stephen Friedman, and Robert Rubin - each left
the company as extraordinarily wealthy men (hundreds of millions
in severance) to "serve" in government: Corzine as a U.S. Senator
(later Governor of New Jersey), Friedman as chairman of the
National Economic Council (later chairman of the President's
Foreign Intelligence Advisory Board), and Rubin as Treasury
Secretary (for Clinton).
It goes like this. Serve 4-6 years at the helm at GS, then go into
government with a quarter billion of severance to compensate for
the minuscule government salary. And as for any lingering
obligations ? Well, what does Goldman do just weeks after Paulson
is sworn in as Treasury Secretary?
It announces a surprising, but not so subtle move that drives DOWN
gasoline prices, short-term. The opposite of what they had been
doing in the years prior to this. Not just a little short selling
either - it was an aggressive move in retrospect, since there was
no underlying reason for it at all on the supply side. OPEC was
horrified and blindsided.
And surprisingly, it was a move that "lost" about $6 billion from
commodity investors (in two weeks) who still held onto long
positions. Almost all of these were oil companies themselves or
overseas speculators.
Nice chess move in a way, to finance a re-election move "off the
books" so to speak as it is coming just months before the
election - that: according to cynics. What GS did - in effect- was
to tell its traders - we are going to see the futures price of
gasoline drop by 25% in one month. Tell your most trusted
independent investors to get out now... or else. Let big oil and
the Euro speculators take the loss. Very Enron-like, no? ...and
need anyone add ... Mission accomplished. Almost theatrical.
Now, it may be hard to swallow this, for the political idealist,
or for the free-market advocate, including some neo-cons who are
just as shocked as the rest of us at high level "meddling" -- that
this kind of market manipulation can go on at the Treasury level,
and behind our collective backs - for whatever reason. But it only
happens infrequently, and in fact this is the first time it has
been used aggressively during Bush's tenure.
But the Washington Post has revealed another leg of the
manipulation ploy - the one designed to show citizens that they
are better-off than the "liberal press" is telling them - the one
in which our Federal government long ago teamed-up with GS to form
a clandestine group know as the PPT- or Plunge Protection Team. It
is semi-official, but has access to billions in treasury assets
and is controlled by the aforementioned secretary pf Treasury -
Paulson (who BTW is a "Fundamentalist," a so-called Christian
Scientist). PPT is supposed to jump in and buy stocks when the
economy is in trouble in order to prevent recession
"steamrolling," as happened prior to the Great Depression -
prevent the "run on the bank" so to speak.
But it may turn out that recently, from early-October on, they
have overshot their mandate, buying stocks long and have been
pushing the stock market up to new records, just prior to the
November elections by overly aggressive buying - which is
certainly not part of any anti-recession mandate, as this is NOT
an economic crisis, yet.
Ronald Reagan formed the PPT with Executive Order 12631. It's just
another way of "painting the tape" (Using your tax money, or newly
printed Federal Reserve dollars) to manipulate "free" markets for
political goals. Goldman of course is a founding member of the
secretive PPT and yet it gets its normal retail commission for
every share purchased and sold. It will profit handsomely and has
probably already made back Paulson's huge severance package, in
just the gasoline trades alone.
Every share which has been bought recently to push the stock
market to new highs - or futures bet on the gasoline shorts - will
be sold after the election so that there will be little trace of
what has happened - and perhaps even a net profit. You need some
profits to keep things like this silent for a few months, even
after Bush pulls off a narrow victory to maintain control.
This is the way US politics operates today. That is - unless more
of us can raise a feeble voice in protest. I just wish that there
was a viable and "honest" third party. There is none - now - and
if the Democrats win, it will be more of the same. In fact there
are reasons not to join the Bush opposition - national pride being
one.
If regime change does happen, let's hope that it does not result
eventually in the national disgrace of having Bush, Cheney and
Rummy on trial overseas for war crimes ... the accusation being
promoting war against a sovereign nation, under false pretenses,
resulting in over half a million dead Iraqi. That is serious and
who wants to see an American President treated like a common
criminal?
But that is precisely what is "in the cards" with a Pelosi
speakership. House Democratic leader Nancy Pelosi says she will
"drain the swamp" [in her fondest wish] should the Dems win
control - and Pelosi takes the gavel as the first" Madam Speaker"
in the history of American Politics. Many suspect she has already
been in contact with prosecutors in the Hague, and is gloating in
vindication for her strong opposition to Bush, with every new
poll.
I would not want to be on the same Airline Flight she gets on.
Signed,
Harry Tuttle Brazilian cynic-extraordinaire & wannabe GS-CEO
