But officials in the Third World don't see the subject as academic. Reserve Bank of India Governor Duvvuri Subbarao charges "Speculative movements in commodity derivative markets are also causing volatility in prices," he said.
The World Bank is meeting on this issue this week because it is seen as a matter of "utmost urgency."
"The price of food is a matter of life and death for the very poorest people in the world," said Tom Arnold, CEO of Concern Worldwide, the international humanitarian agency, ahead of his participation at The Open Forum on Food at World Bank headquarters.
He adds, --with many families spending up to 80% of their income on basic foods to survive, even the slightest increase in price can have devastating effects and become a crises for the poorest."
Journalist Josh Clark argues on the website "How Stuff Works" that much of the oil speculation is rooted in the financial crisis, "The next time you drive to the gas station, only to find prices are still sky high compared to just a few years ago, take notice of the rows of foreclosed houses you'll pass along the way. They may seem like two parts of a spell of economic bad luck, but high gas prices and home foreclosures are actually very much interrelated. Before most people were even aware there was an economic crisis, investment managers abandoned failing mortgage-backed securities and looked for other lucrative investments. What they settled on was oil futures."
The debate within the industry is more subdued, perhaps to avoid a public fight between suppliers and distributors who don't want to rock the boat. But some officials like Dan Gilligan, president of the Petroleum Marketers Association, representing 8,000 retail and wholesale suppliers has spoken out.
He argues, "Approximately 60 to 70 percent of the oil contracts in the futures markets are now held by speculative entities. Not by companies that need oil, not by the airlines, not by the oil companies. But by investors who profit money from their speculative positions."
Now, a prominent and popular market analyst is throwing caution to the wind by blowing the whistle on speculators.
Finance expert Phil Davis runs a website and widely read newsletter to monitor stocks and options trades. He's a professional's professional, whose grandfather taught him to buy stocks when he was just ten years old.
His website is Phil's Stock World, and stocks are his world. He's subtitled the site, "High Finance for Real People."
He is usually a sober and calm analyst, not known as maverick or dissenter.
When I met Phil the other night, he was on fire, enraged by what he believes is the scam of the century that no one wants to talk about, because so many powerful people armed with legions of lawyers want unquestioning allegiance, and will sue you into silence.
He studies the oil/food issue carefully and has concluded, " It's a scam folks, it's nothing but a huge scam and it's destroying the US economy as well as the entire global economy but no one complains because they are "only' stealing about $1.50 per gallon from each individual person in the industrialized world."
"It's the top 0.01% robbing the next 39.99% -- the bottom 60% can't afford cars anyway (they just starve quietly to death, as food prices climb on fuel costs). If someone breaks into your car and steals a $500 stereo, you go to the police, but if someone charges you an extra $30 every time you fill up your tank 50 times a year ($1,500) you shut up and pay your bill. Great system, right?"
Phil is just getting started, as he delves into the intricacies of the NYMEX market that handles these trades:
"The great thing about the NYMEX is that the traders don't have to take delivery on their contracts, they can simply pay to roll them over to the next settlement price, even if no one is actually buying the barrels. That's how we have developed a massive glut of 677 Million barrels worth of contracts in the front four months on the NYMEX and, come rollover day -- that will be the amount of barrels "on order" for the front 3 months, unless a lot barrels get dumped at market prices fast."
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