When George Soros’ new book The New Paradigm for Financial Markets; the Credit Crisis of 2008 was released, I was eager to read it. Not only does he have a great track record as a progressive but he has been a big (and successful) player in global financial markets. I fully intended to review the book, but before beginning I decided to check out what he had to say on the runaway escalation of oil and gas prices. And in the back of my mind there was the Phil Gramm story. McCain’s chief lobbyist until very recently was a paid lobbyist for UBS, a major Swiss bank which is reportedly in serious trouble. My guess paid off. Gramm is directly responsible for the present the series of economic bubbles which now threaten to bring down the entire U.S. economy.
My first step was to check out testimony given by Soros on June 3, to an Oversight Hearing on FTC Advanced Rulemaking on Oil Market Manipulation, held by the U.S. Senate. While disclaiming expertise on oil markets, he said that he was confident that his “life-long study of bubbles,” allowed him to understand how speculators were responsible for the recent sharp rise in the oil futures market and gasoline prices. By their intervention in these markets they reinforced a prevailing trend toward higher prices. He enumerated the underlying factors pushing the market up and then discussed the role of the financial institutions in creating a bubble.