High Gas Prices and The Fed

On Saturday night's Fox News special "Paying at the Pump," host Eric Bolling offered a "Top Secret" plan to bring down the high cost of gasoline. Mr. Bolling insisted that the government should significantly raise margin requirements on oil traders in order to curb speculative trading, which would hence drive down the price of domestic crude. This is a flawed idea. Big American investment banks and speculators can buy and sell oil futures wherever they want, like the London-based Intercontinental ICE. Most, however, use the Chicago Mercantile Exchange (CME). Over 1 million light sweet crude contracts are cleared daily on the CME, and raising margin requirements would simply send that volume to other exchanges overseas, like London, Hong Kong and Singapore. The result would be one more segment of our economy being outsourced. The meteoric rise in gas prices is not a matter of energy policy. It is not a matter of environmental policy. It is not a matter of commodities futures regulatory...(Read Full Post)