This is my opening round at writing an article on a challenging topic: the world financial system and those who make it run. Challenging, because I will need the help of readers who know our financial and banking system thoroughly to help fill in the details.
In fact, almost all the professionals appear to have misjudged this collapse or seen only part of the underlying causes, at each step of the way. But if you have any insider or public, solid information, please share with me here or if you prefer, through our Contact form.
It is worth mentioning that I am also contacting economic experts through other channels that I know, in the search for the best possible information. I am not sure whether they will have the information on this precise topic, however.
A friend of mine from New Jersey came to Queens yesterday and we had a nice lunch and chat together. Among other topics we talked briefly about the economy, and he dropped a bombshell on me: according to him, the Washington Post reported that the real cause of the economic collapse still underway is not just bad mortgage debt and credit default swaps. The real problem is trillions of dollars of speculation on the unregulated commodities market. Guess what the speculation was on? Yes, you guessed it, oil.
The Washington Post has indeed had several articles about oil price fixing, but I think I have not yet found the article that my friend refered to. I will be asking him whether he has a link to offer, or maybe will contact the Washington Post directly about it.
An hour this morning led me to many articles online about 1) the fact that the oil industry is totally price-fixed for a variety of reasons, 2) the price was driven up by concerted efforts of speculators (the exact amount of increase due to this cause seemed to be in dispute as of June), and 3) this is all being vastly underreported.
In addition, I have seen references previously to a 2 trillion dollar plus bailout that is going on behind closed doors, in virtual secrecy, and with recipients of the money that the government will not reveal.
I know I have said a mouthful. That is why I would like to research and find out more. As a humble software developer and Tai Chi Chuan teacher, I do not count inside-Wall-Street-reporting as one of my core skills, and I will learn what I can. Therefore, to repeat, your educated comments or links here would be appreciated while I try to unravel more of this story.
As with the other financial commentary I have written here, the purpose is to reveal that the greedy mindset is very much in operation in our capitalist system and always threatens to corrupt the basically sound concept of rewarding intelligent and determined efforts to provide needed products and services, by paying well for them.
Our current system allows too much gaming of the system, and it appears that speculation on oil provided the vehicle for a Ponzi scheme (also known as a pyramid scheme) that the government is afraid to reveal.
To be explained:
1) Why did the price of oil rise over $145, and within two months drop back as low as $50
2) How can the worldwide, continuing economic chaos be explained by some bad mortgage debt in the United States
Come back in a few days, I hope to have an update for you.