Creating the Carbon-Credit Bubble
On June 26th the House of Representatives passed H.R. 2454: The American Clean Energy and Security Act of 2009. Under this system, the government will issue a fixed number of carbon credits that will give the bearer the right to release carbon into the atmosphere over the course of a year. In future years, the number of credits issued will shrink, in an effort to bring global warming under control.
What this means is that the government will create, out of thin-air, a commodity market that could be valued into the hundreds of billions. Commodity Futures Trading commissioner Bart Chilton believes it will be a $2 trillion market. Robert Shapiro, the former Undersecretary of Commerce in the Clinton administration states, “We are on the verge of creating a new trillion dollar market (through) financial assets that will be securitized, derivatized, and speculated on by Wall Street like the mortgage-backed securities market.” Peter Schweizer, a research fellow at the Hoover Institution, argues in his book Architects of Ruin that this is part of a larger social engineering scheme in which wealth is simply “created” by government mandate.
This is a sharp deviation from President Obama’s statement that, “The most critical part of our strategy is to ensure that we do not return to an economic cycle of bubble and bust in this country. We know that an economy built on reckless speculation, inflated home prices, and maxed-out credit cards does not create lasting wealth.”
If these financial instruments are indeed packaged and sold on Wall Street, it will surely result in speculation, and potentially inflated prices that could lead to a problem similar to what was seen in the housing market. While the creation of such a market does not automatically mean it will collapse, we should all be wary of backing a trillion dollar trading scheme that is not backed with any tangible assets.
By sharing your phone number and/or email address, you consent to receive emails, calls, and texts from Pelican Action. You may opt-out at any time.