President Obama thinks he knows how to soothe everyone’s pain at the pump. The White House will unveil a $52 million proposal Tuesday at the White House, where he will be joined by Attorney General Eric Holder. According to the Associated Press,
the proposal said it aims to detect and deter illegal manipulation by energy speculators, the type of practices that many Democrats blame for the high cost of gasoline. The officials spoke on the condition of anonymity to discuss the plan ahead of Obama’s announcement.
The President’s $52 million proposal will reportedly “curtail the ability of speculators to take unlawful advantage of oil price volatility.”
The Obama plan will, again, according to the AP,
— Increase six-fold the surveillance and enforcement staff of the Commodity Futures Trading Commission to better deter oil market manipulation.
— Increase spending on technology to provide better oversight and surveillance of energy markets.
— Increase civil and criminal penalties against firms that engage in market manipulation from $1 million to $10 million.
— Give the Commodity Futures Trading Commission authority to increase the amount of money that a trader must put up to back a trading position. The administration officials said such authority could help limit disruptions in energy markets.
And if all that isn’t enough, the President will turn the White House Council of Economic Advisers loose on the CFTC’s data.
Speculators are convenient scapegoats for all governments. In August 1971, President Nixon told the nation that he was “temporarily” closing the gold window. The amount of gold held in Fort Knox as a percentage of outstanding paper dollar claims against it — had declined from 55% to 22% — leaving the Treasury desperately close to default. So the Nixon Treasury either had to quit borrowing and quit printing money, or snip the dollar’s link to gold.
Of course, the conservative Nixon couldn’t admit that his big-spending policies were wrecking the dollar. No, it was those speculators, he claimed.
In the past seven years, there has been an average of one international monetary crisis every year. Now who gains from these crises? Not the workingman; not the investor; not the real producers of wealth. The gainers are the international money speculators. Because they thrive on crises, they help to create them.
In other speculator bashing news today, The Zimbabwe Mail reports that the Zimbabwe government is ordering 109 companies to make new applications for mineral titles.
The order follows the ministry of mines’ decision in January to hike pre-exploration fees for most minerals by as much as 8,000 percent in a move the ministry said was meant to curb the speculative holding of mine titles.
The Ministry of the Mines is requiring companies and individuals to use the titles or lose them, and a number of titles have been surrendered to the Ministry.
Despite the policy, Ministry officials believe there will be a nearly 16% growth in registering titles this year.
“The new mining fees are not meant to discourage indigenous players, rather they seek to do away with the speculative tendencies in the mining sector. Over the past few months, we have seen a number of claims being surrendered to the Ministry following the adoption of the policy as well as the implementation of the Use It or Lose It Policy,” said Dr Obert Mpofu, Mines and Mining Development Minister.
Despite the directive, it’s hard to imagine miners lining up to register for mining titles in Zimbabwe, and, as for Obama’s plan, Zero Hedge is “100% confident that just like every failed attempt at central planning, all Obama will achieve is another spike in crude prices, just in time for the next global reliquification cycle, just in time for 2012′s debt ceiling scandal, and just in time for the reelection.”
