News Analysis by Graeme Jones
copyright June 18, 2008
The people who own and control a thing determine the purpose of that thing. Given this, it can be truthfully said that the purpose of the American mass media is to protect the Capitalist establishment from the American people. One of the ways that it does this is by a very focused news management policy, that keeps activities at the apex of the capitalist power pyramid hidden behind a media smoke-screen. Ignorance and confusion is promoted in order to protect the predation that rules at the center of American power.
For this reason, few people will be aware that the current escalation in oil prices is being driven, to a significant extent, by financial speculation on the part of American banks. And that speculation is being done with taxpayer money. This is revealed to us by both Ralph Nader and Paul Craig Roberts. Roberts was an Assistant Secretary of the Treasury in the Reagan administration and former Associate Editor of the Wall Street Journal. Writing for the Counterpunch website in June 2008, Roberts asserts:
“In an effort to forestall a serious recession and further crises in derivative instruments, the Federal Reserve is pouring out liquidity that is financing speculation in oil futures contracts. Hedge funds and investment banks are restoring their impaired capital structures with profits made by speculating in highly leveraged oil future contracts, just as real estate speculators flipping contracts pushed up home prices……The crisis that looms for the US is the loss of its world currency role. Once the dollar loses that role, the US government will not be able to finance its operations by borrowing abroad, and foreigners will cease to finance the massive US trade deficit. This crisis will eliminate the US as a world power.”
The Federal Reserve is throwing taxpayer money at the large banks in order to protect them from self-induced bankruptcy. The Fed’s intention is that this money will be used by the banks to disburse credit to their business customers, thereby keeping the economy afloat. But the banks are using that money to build up their depleted capital base by speculating on the oil futures market.
If the people’s own money is being used to artificially drive up oil prices, it is clearly necessary that the media keep that fact safely obscured. Along with the fact that, while the United States Federal Reserve is spoken of by the media as an American Governmental institution, it is in fact nothing of the sort. It is really the private property of the banking cartel and sees its duty accordingly.
It needs to be added that such a massive, and ongoing, currency disbursement on the part of the Fed is putting significant downward pressure on the value of the dollar. At the same time speculative pressure on oil prices stokes the fires of inflation.
The deliciously ironic terminal logic here is that the sustainability of the entire capitalist system is being destroyed, in order to protect the very people who are in fact destroying that system.
Categories: social and political commentary by Graeme Jones