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10/14/2006 Archived Entry: "Another law ignored"
GASOLINE IS CHEAP, JUST BEFORE THE ELECTIONS. How convenient. Americans were clearly unhappy about paying $3 per gallon, despite the sniggering from gas-tax victims in Europe, who routinely pay twice as much. There is credible evidence that the price of gasoline is being manipulated. Henry M. Paulson, Jr., former Chairman and Chief Executive Officer of Goldman Sachs, was sworn in as Secretary of the Treasury on July 10, 2006. Less than a month later, Goldman Sachs sold over $6 billion worth of gasoline futures contracts. Whether you believe in market manipulations or not, dumping $6 billion worth of anything in such a short time will drive prices down, even if only temporarily.
Speaking of temporary, does anyone remember Katrina and its effect on oil? With production facilities and pipelines wrecked, the fedgov sold and loaned nearly 21 million barrels of oil in late 2005, drawing down the Strategic Petroleum Reserve. That's what the SPR is for, right?
There's just one teensy little problem. The law creating the SPR requires that In no case may the Reserve be drawn down under this subsection ... for more than 60 days with respect to each such shortage.
If you think that the 20 million barrels have been replaced, you haven't been reading about the fate of the rule of law. See for yourself; the SPR inventory is shown here.
If the SPR had been managed according to law, the price of oil (and gasoline) would almost certainly have gone even higher than it did. But the rule of law is dead in this country; so dead that few even notice when laws passed by Congress are openly defied.
Posted by Silver @ 11:27 AM CST