Have you ever read or seen a Sherlock Holmes mystery? I have always loved those stories. I love the way Holmes takes what seems to be the smallest detail and used it to find the culprit. A speck of dirt from someone’s shoe, a bit of tobacco left at the scene of the crime, Holmes always found ways to use those seemingly meaningless clues solve the unsolvable.

All the things that Holmes looked at were smaller parts of the greater whole. The character was able to show the chain of events that connected
that bit of tobacco, or type of paper. All the little specks in the story where always interconnected in a complex way that in the end simply showed
the big picture to the brilliant mind of Sherlock Holmes.

In an odd way that enjoyment of Sir Doyle’s creation has gone a long way toward helping me understand the in, out and oddities of today’s energy
market. Let’s go back and look at market forces over the last couple years. We can start with the housing market in the US. There was incredible growth and lots of money made by people in the sub-prime mortgage market. It was a heck of a ride all the way till the point it collapsed and drug down several banks and lending institutions. All of a sudden the bubble burst and sent hundreds of speculators looking for the next big thing to make a fortune on. As money began to flow away from the sub-prime mortgages they begin to flood into other areas, especially oil.

As the sub-prime plummeted the oil futures shot up, nearly doubling in a year. No aspect of supply and demand caused the price to go up. No natural disaster in any part of the world caused it to go up. The practice of gambling on the futures market is what has caused the increase in a barrel
of oil to gush up to where it is at today.

Capitalism is a great and wonderful thing; it has allowed people to accomplish many wonderful things. Speculators and investment houses have helped many people meet their goals and accomplish their financial dreams. The market, however, should not be the ultimate arbiter of value in the world.
We should not allow futures trading on those things that are paramount to our survival, especially energy and food. We need investment in energy and agriculture but both industries carry more than enough of their own risk. We do not need to add more through futures trading in those markets.
If you want to gamble on Wal-Mart, great, take your chances with Boeing, or Quest. Leave energy and agriculture to the forces of supply and demand. We need to change the rules so that our future does not rely on the toss of the dice.