How are HSBC and high gasoline prices related? Prices are driven by speculators. We “are experiencing demand shock from a new category of speculators: institutional investors like corporate and government pension funds, university endowments, and sovereign wealth funds,” said Michael Masters, managing member of Masters Capital Management, a Virgin Islands-based hedge fund. “Index speculators are the primary cause of the recent price spikes in commodities.”
The United States Treasury reports that the top five users of swap agreements are investment banks, four of which dominate swap dealing in commodities and commodities futures: Bank of America, Citigroup, JPMorgan Chase, HSBC North America Holdings, and Wachovia. The explosion in the number of financial players in the energy markets has occurred particularly in the past two years—also a period of soaring energy prices.
Similar to the way HSBC helped to ruin the subprime market, HSBC is now a key player in driving gasoline prices, and everything related to oil, to new unheard of levels. It was disgusting to watch HSBC hurt their own customers. That changed as subprime poisoned the world economy. Now we see how HSBC has helped to hurt every single American as fuel prices skyrocket.
For a detailed look at how loopholes and swap agreements are used see this article (opens in a new window)
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