It’s not OPEC’s fault

Dear Congressman Schiff:

I've only recently learned that gas prices are affected by futures traders. I thought OPEC was solely responsible for the high prices. But as it turns out, the bubble in real estate prices (before the subprime mortgage crisis) and the current bubble in gas prices have a lot in common. Investors don't mind high prices if they believe they will continue to rise indefinitely, but eventually every market corrects itself. The bubble bursts and we have a recession until the next bubble.

In the 80s, it was the reckless S&L loans to foreign countries that helped bring about the Black Monday of 1987 ("The 80s are over!!") and precipitated the deep recession of the early 90s. In the later 90s, it was the frenzied speculation in dot-coms that brought about the dot-bomb and the recession that was already in place by 9/11. This time around, we're hit by two bubbles at once, subprime mortgages and oil futures. Obviously investors can't exercise caution when they smell an opportunity to make a killing.

If the CFTC were to raise margin requirements and close loopholes that allow unregulated speculation in energy futures, the speculative excess that has driven gas prices so high would be reined in. Please take action to pressure the CFTC to make the changes that will benefit almost every American. The current extremes in gas prices benefit only a small elite.