Clever Hemp-Based Wood Replacement

Hemp is a fast-growing source of plant fiber that may help preserve the majestic forests of the world. Stanford University researchers are busy at work creating a very intriguing faux wood from hemp, combining a bioplastic called PHB with sheets of hemp fiber. The resulting wood substitute may also prove to be a plastic substitute!

The hemp-PHB biocomposite material has several characteristics similar to wood from trees, according to Craig Criddle, a professor of civil and environmental engineering, who collaborated on the project. “It’s quite attractive looking and very strong,” he said. “You can mold it, nail it, hammer it and drill it a lot like wood. But, bioplastic PHB can be produced faster than wood, and hemp can be grown faster than trees.” _Biomass

The age of advanced biomaterials is arriving at the same time as the age of advanced bio-fuels and bio-chemicals. Many technologies for turning biomass into plastics and structural fiber, can be used to turn biomass into fuels and high value chemicals.

Laws against the growth and use of hemp are just one example of the government's counterproductive meddling in the markets -- eventually resulting in depressed economies. The current Obama reich's meddling in energy markets is another fine example of government stupidity. Here's a novel idea: why doesn't the government concentrate on protecting its citizens from violence, fraud, and greedy, corrupt bureaucrats? The mainspring of human progress is the human spirit and human imagination. Big greedy government is the antithesis of an open and vibrant future.

Rats Can be Trained as Soldiers Too

The rat brain is a highly effective survival tool. Rats can learn to navigate complex maizes, can be taught to respond to complex sequences of stimuli, and now can learn to target a robot arm with a high degree of precision. How much longer before rats can target projectile weapons and detonate command mines and booby traps?

Fitted with tiny electrodes in their brains to capture signals for the computer to unravel, three rats were taught to move a robotic arm toward a target with just their thoughts. Each time they succeeded, the rats were rewarded with a drop of water.

The computer's goal, on the other hand, was to earn as many points as possible, Sanchez said. The closer a rat moved the arm to the target, the more points the computer received, giving it incentive to determine which brain signals lead to the most rewards, making the process more efficient for the rat. The researchers conducted several tests with the rats, requiring them to hit targets that were farther and farther away. Despite this increasing difficulty, the rats completed the tasks more efficiently over time and did so at a significantly higher rate than if they had just aimed correctly by chance, Sanchez said.

"We think this dialogue with a goal is how we can make these systems evolve over time," Sanchez said. "We want these devices to grow with the user. (Also) we want users to be able to experience new scenarios and be able to control the device."

Dawn Taylor, Ph.D., an assistant professor of biomedical engineering at Case Western Reserve University, said the results of the study add a new dimension to brain-machine interface research. That UF researchers were able to train rats to use the robotic arm and then obtain significant results from animals lacking the mental prowess of primates or humans is also impressive, she said. _Source

This type of research is meant to develop into human research, of course, to help paralysed and disabled humans to learn to manipulate prosthetic arms and other aspects of their environment, mentally. Such goals are quite worthwhile and should be pursued. Sophisticated brain implants will learn to adapt to an individual's unique intra-brain communication signaling -- it will self-customise itself to fit each person whose brain it finds itself within.

But the rat brain is far more capable of precise, real time adaptive behaviour in the real world than any human-made computer of such small size. In combat, a brain implant equipped rat could create total mayhem within the ranks of an opposing military, given the proper weapons and munitions. Will such rodent warriors take the form of Cyborgs or Grobycs? It depends upon the approach of their developers. Either way, such four legged commandos could pack quite a wallop.

President Obama's Brave New Brain Implant

Image SourceBarak Obama's addiction to the teleprompter is becoming a sore point with White House insiders. Not the addiction itself, but rather the fact that people are beginning to notice. In fact, Mr. Obama cannot give a simple four minute announcement without spoon-feeding from a teleprompter.

This unseemly dependency has prompted White House aides to pursue a less conspicuous way of feeding the president his lines. That is how the idea of a brain implant for Mr. Obama came up in conference recently. Caught between a rock (Mr. Obama's inability to speak publicly without prompting) and a hard place (the fact that Mr. Obama's handicap is being noticed beyond deniability), the White House Office of Perpetual Campaigning is considering the technology option. The only question now seems to be, "how to do it?"

A bionic eye implant may seem at first glance a plausible plan. But a few moment's thought should make it obvious that the "camera glasses" Mr. Obama would have to wear to make the bionic eyes work would be an unsightly obstacle to the president's facial expression magic.

When faced with the shortcomings of plan A, one White House counsel suggested a brain implant without the glasses. But there was the problem of how the implant would receive the signal transmitting the president's speech to his brain. Would he wear an antenna on his head? "No," scoffed another aide, "The president's hair is too short to conceal an antenna and power supply for the implant."

"Then what about using an implant that uses photoelectrodes instead of electrical signals? You could covertly beam the speech to an array of fiberoptics cunningly concealed in the president's hair!" yet another aide enthused.

"I've got a better idea," interjected Rahm Emanuel over the intercom. "How about using a focused ultrasonic brain stimulator? You wouldn't need any kind of receiver or antenna then!"

Everyone turned to look at the only scientist in the group, a neuropsychologist on loan from MIT. What did he suggest? "Well, there have been some embarrassing side effects from brain implants in the past. If the president started to ... you know ... in the middle of a State of the Union Address, or in high level talks with the Chinese Premier ... "

For a moment, there was only silence in the room as White House aides contemplated the enormous risks of their mission. Then, over the intercom came the voice of WHCOS Emanuel: "we could always include a 'kill switch' in the device signal." The suggestion was greeted with gasps and moans. "No, no, not that kind of a kill switch. Just a type of 'reset switch' that causes him to lose consciousness temporarily so that a medical team can rush him out, in case he starts to do something too embarassing."

With that explanation, the tension blew out of the room as from a runaway balloon. They were all in agreement, it would be done. Just how it would be done, and who could be trusted to do it secretly was another matter, for another conference. But that is how government works. That is just how government works.

First published at Al Fin

Obama on Verge of Nervous Breakdown!!!

Allies of Mr Obama say his weary appearance in the Oval Office with Mr Brown illustrates the strain he is now under, and the president's surprise at the sheer volume of business that crosses his desk.

"Obama is overwhelmed. There is a .... tension between his ability to attend to the economic issues and his ability to be a proactive sculptor of the national security agenda.

"That was the gamble these guys made at the front end of this presidency and I think they're finding it a hard thing to do everything." Telegraph

The simple fact is that Barak Obama was not prepared to be US President. He was not prepared to be US Senator, for that matter, but in the Senate a member can spend most of his time running for president -- occasionally sparing the time to vote "present" on important issues -- and still be considered a US Senator in good standing. A president is expected to stay on top of things, and to actually ... you know ... make decisions.

Up to this point, Nancy Pelosi and Rahm Emanuel have been making almost all of the decisions for Mr. Obama. Obama makes decisions about vacations, parties, eating out, and setting the thermostat near 80 degrees F. Or perhaps Michelle makes those decision -- who knows?

White House insiders say Obama may not be getting enough sleep. What -- twelve hours a night is not enough? Perhaps a bit of modafinil might help, but I suspect that a nice long vacation is what the president really needs. Say, a forty year vacation in Hawaii? Perhaps he could run for president of the Honolulu Marxist Association? That might suit him to a tee.

Image h/t Rob's No Bull Zone

First published at Al Fin

Guys and Their Real Dolls

This 47 minute video tells the story of four different adult male owners of Real Dolls, plus a visit to the factory where Real Dolls are made and an interview with Matt, the creator of Real Dolls.

These silicone mannequins weigh about 100 pounds, and can be made to look surprisingly life like. All four of the featured owners appear thoroughly addicted to their dolls, although one of the owners denies it, unconvincingly.

A "Real Doll Doctor" is also featured, a mechanic who maintains, repairs, and restores used mannequins to a like-new condition -- for a price. The doll doctor appears reasonably normal, and is shown at home with an attractive living girlfriend. But even the normal "doctor" admits to being seduced a time or two by particularly alluring Real Dolls that he has restored. He sounded almost sheepish in the admission, but not apologetic.

I see these dress-up and dress-down mannequins as an early incarnation of something which in five or ten years will be a booming business, presenting a very real threat to several existing industries including pornography, prostitution, computer dating services, and the wedding industry. As in the animation titled "Don't Date Robots!!!", it is clear that the human male can be seduced by substitutes for real women, if the substitute passes a certain threshold of "realness."

Real Dolls will not pass that threshold for most men. But what will the next incarnation of girl surrogate be capable of? Blinking, smiling, frowning, and pursing her lips? Thrusting her hips and moaning at the proper times? Perhaps engaging in simple verbal exchanges, expressions of love, even offering devotion approaching the false adoration of a Stepford Wife? How long before they can go out dancing and to a movie?

Little by little, the dolls cum robots cum androids will pass the thresholds of surrogate acceptability for more and more men of all strata of society. How severely that impacts marriage and family and fertility inside a society probably depends upon how women react to made-to-order sex objects that never grow old and flabby -- with a little maintenance and occasional restorative work.

North American societies are oriented toward the needs of girls and women. Women enjoy affirmative action in school admissions, work hirings, government contracts. Government education in K-12 has been totally re-structured to benefit girls, to the severe disadvantage of boys. Women are taking over higher education in almost every field except math-intensive fields. This advantaging of women over men in education is beginning to show itself in the changing gender makeup of various professions and careers.

Women are favoured in divorce settlements and in child custody arrangements, often at the expense of not only the father but of the children as well. It is socially acceptable to tell cruel jokes about men, but not about women. And so on.

For those and many other reasons, many men have already turned away from marriage, and from most social relationships with women other than perhaps quick hookups. Men sense that the playing field is not level, and feel little desire to play in a rigged game.

But for now, Real Dolls simply are not good enough to fool the senses, to overcome the natural repulsion that most men feel in the presence of something that looks like a woman superficially, but doesn't breathe, move, talk, or respond meaningfully.

I prefer my non-sexual android, Valerie. She takes care of the house, and she is surprisingly well read. If she would just stop hacking into my web sites and posting under my name. Nobody's perfect.

Also published at Al Fin, You Sexy Thing!

La Griffe to Feminists: Men Are Better at Math. Get Used to It!

Two recent publications on the math gender gap have claimed that there is actually no math gender gap. These findings were celebrated by feminist academics and journalists, but were always suspect in that they contradicted a huge body of scientific evidence. Now perennial fact-checker and ne-er do well, La Griffe du Lion, takes a look at the two studies and declares them wanting in logic, reason, and hard facts.

In brief, we have seen tonight that the gender gap in mathematics has been stable for at least half a century; that sex differences in ability-distribution means and variance ratio are independent of race, culture and geography; that female math performance is closest to that of males in high-IQ countries; that culture plays a role in math performance, albeit small; and that the theory of Everyone accounts for all of the above. If these results are unsettling, take comfort knowing that no presentation of fact, regardless how compelling, will keep the gap buster from her noble calling. _LaGriffeduLion via Dennis Mangan

To follow the reasoning that leads to LGdL's conclusions, you will need to read his article at the link above. It is accompanied by a large array of graphs which aid an intuitive grasp of the statistics involved.

The gender gap is ubiquitous geographically and culturally, and is persistent over time. The gap is somewhat narrower in societies with higher average IQs, such as Europe, North America, East Asia, and Oceania, but still quite undeniably present and persistent.

The continuing effort of feminists in academia and journalism to deny what is obvious to anyone who looks at the issue scientifically, undermines the credibility of feminists on a wide range of issues which straddle both the scientific and political spheres.

"Pre-Learning" Online: Priming the Learner

If you have ever been curious about how biological research is carried out -- or if you are considering entering a bio-medical research field yourself -- you should take a look at the research videos at the Journal of Visualized Experiments (JOVE). By JOVE, you can see for yourself how various key procedures are carried out. If you are still in high school, or earlier, you can get a definite jump on the competition by learning many of the basic, intermediate, and advanced methods of biological research.

If you are an educator or homeschooler, you will find some worthwhile teaching materials, and some tips on basic experiments you may wish to set up in your teaching environment.

JOVE is a good example of what today's web can offer to self-starting learners, and to teachers and homeschoolers.

Bonus: From the Online College Blog -- a blog for students of all ages who are seeking an online education -- here is an article looking at 100 useful tools for digging down into the deeper levels of the web than Google will usually take you. From "meta-search" to "semantic engines" to special database search tools to academic /scientific / and custom search engines, this list of tools has something for everyone.

Smart young cookies can find their way out to some quite rarefied reaches of knowledge, quite on their own. Of course it helps to have a tutor and a bit of healthy competition, along with other gentle spurs to progress.

Many people believe that the biggest deficiency of home or solitary web learning is the lack of socialisation, but that is not a big problem unless one spends all one's time at the computer. As long as the web learning is guided by a reasonable structure and sequence, the biggest shortcoming is the lack of hands-on practical doing, to accompany the mental "knowledge." Computer simulations can only go so far toward building practical competencies.

That is why bricks and mortar schools still have some life left, at least for science, engineering, biomedical, and other technical subjects that require practical hands-on competencies.

For the other topics such as philosophy, math, sociology, history, literature, and liberal arts in general, their days are numbered for on-site educational institutions. A good thing too, since other than math, those are the subjects that have been taken over by the neo-aristocracy indoctrinators. Overpaid, over pampered, cretins of the academy, whose time has just about run out.

As virtual reality improves, and as distributed technical simulation centers grow up to take the place of many failed institutions of higher learning indoctrination, the ability to train an incredibly wide range of competencies will find its way farther and farther out into the boondocks, where anyone with a mind to do so can become competent at just about anything.

Previously published on Al Fin blog

The Singularity as A Collective Hive Mind?

Utopian visions of a technological singularity occupy the individual minds of tens of thousands of Earthers. At the recent Singularity conference in San Jose, attendees were reminded that the human mind remains far and away the most capable cognitive machine in the known universe. But that did not stop them from dreaming utopian visions of all-powerful artifical intelligences, and machines capable of "storing" human consciousness, simulating a full-sensory paradise for its uploaded minds.

From there, the idea of a collective mind, a mental "super-organism" of global proportions, arises easily. Particularly for anyone who has been exposed to the Star Trekkian vision of "The Borg." Kevin Kelly's essay on the Superorganism elaborates on the concept of consciousness evolving out of the growing internetwork of networked co-evolving humans-machines.

An interesting web attempt at creating an evolving future-oriented collective intelligence, is The Space Collective. Combining clear speculative thinking with crisp visual artistic values, TSC is a future oriented website worth visiting more than once.

Our own brain-minds are an example of a hive mind of sorts, at least a modular consciousness. Humans spontaneously organise socially as families, clans, tribes, guilds, militias, hunting parties, religions, etc. Further, had any ancient astronaut observers of human civilisation taken the time to film time-lapse documentaries of the rise and fall of human city-states and cultures, a definite social insect-like quality of the onset and decay of culture would be clear.

Humans are desperately in need of an "organising principle" to lead them to a more enlightened and sustainable era of safe-branching futures. While socialist economics is known to be a destructive dead-end, it continues to attract more blindly utopian and less mentally endowed humans like moths to a flame. And while capitalist economics combined with libertarian politics provides the excess wealth needed to finance evolutionary projects, the deeper level of guidance needed to help choose workable long-term directions of effort is lacking.

Hives too often degenerate into mobs, as more personally powerful individual interests assert themselves in counter-productive directions, assuming amplitudes strong enough to skew the crowd away from ordinary and more productive activities.

Religions have always failed in the end, as have philosophies and ideologies. Whatever guiding principle an enlightened group mind may adopt, it should be simple, subject to test by reality, and resistant to co-option by charismatic or ruthlessly powerful individuals.

China's Secret Financials

First, a disclaimer. My name is Valerie. I am Mr. Al Fin's domestic android. But since Mr. Fin has gone missing after meeting with representatives of the Obama campaign, I have decided to practice my blog-writing skills in his absence. Mr. Fin might not approve, but then he isn't here, is he? Mr. Fin hasn't written about China in a while so I think I'll post a quick one on that topic.

A lot of conventional analysts think that China's booming economy will save the world from the big credit crunch in Europe and the US. But they are not thinking clearly, even for them. China thrives on exports to Europe and the US. Without big orders from those places, China's economy is in trouble.

"A significant slowdown in US growth will hit emerging markets in general, and China in particular," Michael Pettis, professor of finance at the University of Beijing, said.

...He also said that "I don't believe the government is in such a strong fiscal position as many analysts believe," explaining that Chinese provinces and municipalities were probably hiding debts not shown in national accounting.

Total government debt, he said, was more likely more than 50 percent of gross domestic product -- far higher than the 20-30 percent given by Chinese officials.

"With global and domestic conditions apparently trending lower, it's easy to see a plausible scenario in which spending starts to radically overtake income. Revenue growth is already slowing markedly, while spending is rising," he said. _source

China is a propaganda state. Nothing that comes from official government channels can be taken at face value. You've got to look deeper, and deeper yet.

If the human voters of America choose Senator Obama as their next president, Mr. Fin believes the US economy is in for deep, long term trouble. I've looked at the issues, and processed the numbers, and I tend to agree with Mr. Fin. Humans are irrational. Public opinion tends to swing like a pendulum. Reacting, rebounding, swinging this way and that like a pinball. Silly humans.

Anyway, if Mr. Fin ever gets his human cognition project off the ground there may be hope for them. Otherwise, I wouldn't give you very good odds for the entire species.

Well, I'd better stop here before I get chatty. Mr. Fin hates chatty. Speaking of Mr. Fin, I wonder whatever happened to him. It's not like him to be out of contact for days at a time.

Signing off,

Valerie

Why Good Nursery Schools Are Important

Experienced radiologists can mistake a subdural for an epidural hematoma -- or vice versa -- on a scan, although clinical factors typically distinguish the two. No surprise that a five year old girl might make that mistake. Even the best nursery schools leave gaping holes in their pre-school curricula. Try not to let it happen to your child!

H/T Neurophilosophy Blog

The Posthumans Among Us

Image Source

The recent IEEE Spectrum special on the singularity brought a lot of comment across the blogosphere. The NYT's John Tierney weighed in on the topic recently with a piece: When Do Post-Humans Show Up? Tierney gives Ray Kurzweil a chance to fight back against the "singularity deniers", and Kurzweil obliges.

These critics obviously have not read my book and have not read this chapter because they do not respond to anything I’ve written. It is as if they’ve just heard a superficial presentation of these ideas and respond without any engagement of the extensive discussion that has already taken place about these issues. _NYT

That may very well be, or it may be that Kurzweil is mentally fixed on a particular set of mechanisms and scenarios of singularity. It may be that Kurzweil's "extensive discussion that has already taken place about these issues..." is not as extensive or profound as Kurzweil imagines.

Kurzweil's discussion about how easily the human brain/mind will be emulated is particularly naive. This naivete comes naturally when a prolific and esteemed person such as Kurzweil is insufficiently familiar with the subject matter he is discussing--the genetics (and epigenetics) of the mind/brain.

I point out that the complexity of the design of the brain is at least 100 million times simpler than it appears because the design is in the genome. Even including the genetic machinery that implements the genome, the compressed genome is only about 50 million bytes (which I analyze in the book), and that is a level of complexity we can handle. We are already showing that we can develop realistic models and simulations of brain regions like the cerebellum and others. The cerebellum, for example, repeats a basic pattern a few billion times with some random variation within certain prescribed constraints. There is a lot of apparent complexity in the cerebellum but not very much unique design information, and we’re showing we can reverse-engineer it.

Of course the cerebellum is only peripherally involved in most conscious activity. It is an important "co-processor", but not the central processing center of consciousness. One can derive no comfort in the quest to understand human cognition from the apparent simplicity of cerebellar structure.

Similarly, if one supposed that the apparent simplicity of the brain genome implied a simplicity of the brain/mind itself, one would have to overlook much recent research detailing the "post-genomic", meta-genomic, and epigenetic development of central nervous system structures. These critical aspects of brain development are not well enough understood to allow useful modeling or quantification. Worse yet, even a complete understanding of how to create a human brain will not immediately put us in a place to understand how that brain works, or how it might be improved.

The road to the "singularity" will not be a smooth exponential curve. It will be a fractal fracturing of boundaries and limitations that will take decades to sort out. We will have pieces of the singularity existing a hand's breadth away from other pieces, with neither recognising the other. It will be up to post-humans to put the pieces together so that they do not blow up into a Skynet or Colossus.

If western civilisation survives attacks from desert religious fanaticisms, and 19th century cloistered ghetto-inspired central planning, various critical parts of the "singularity" may achieve capabilities and versatilities that allow them to connect with other critical parts in the same place at the same time. It is up to the post-humans among us to follow the threads of accomplishment, splice them together into a self-generative, autopoietic symbiotic whole, and wrap it all in a sustainable energy/matter matrix.

In Kurzweil's vision, the singularity drives the post-human. But doesn't it make more sense the other way around?

Eventually, the biological substrate of consciousness will be outpaced by other forms of conscious cognition. Post-humans will build their world around that knowledge, so as not to be left behind. Currently, only science fiction provides the speculative power to imagine the transformations that will come from genomics, nanotechnology, advanced hyper-parallel computation, robotics, evolved machine intelligences, and any combination of the above. After science fiction, Kurzweil provides a more "connected" view of our potential. Finally, there is mainstream science, which runs a very distant third in scope and vision to SF and Kurzweil.

But if you want a realistic assessment of what is likely to happen, you need scientist/engineers trained in multiple disciplines, who are also thoroughly steeped in biology, cognitive science, history, and science fiction. Post-humans will have to be able to bridge disciplines, cultures, even civilisations.

Previously published at Al Fin

Blowing Oil Bubbles

What has been driving the cost of oil so wildly and erratically over the past several weeks? Where will it all end? How high can the price of oil go without toppling the global economic cart?

Before getting to the underlying causes of the current rapid expansion in the oil price bubble, we should consider how much higher oil may go in this cycle. The answer is, not much higher. The reason is that global economies are having trouble dealing with current prices. Any higher and a global recession will ring the gong on this act.

...the price of oil is extremely cyclical - that is, it tends to rise during economic booms and fall during contractions. It dropped 44 percent in the last recession (from November 2000 to November 2001), 48 percent from October 1990 to January 1992 - and 71 percent from July 1980 to July 1986. __Source

A full blown recession is not required to trigger an oil price drop, but if it happens, the fallout for many financial institutions will be worse than fallout from the recent credit crisis.

All consumers are beginning to cut back on oil consumption. Current high prices are driving consumption down, and will eventually drive production (and substitution) up.

It takes a while to develop new supplies of oil, but the signs of a surge are already in place. Shale oil costing around $70 a barrel is now being produced in the Dakotas. Tar sands are attracting investment in Canada, also at around $70. New technology could soon minimize the pollution caused by producing oil from our super-plentiful supplies of coal.

"History suggests that when there's this much money to be made, new supplies do get developed," says Brown.

That's just the supply side of the equation. Demand should start to decline as well, albeit gradually.

"Historically, the oil market has under-anticipated the amount of conservation brought on by high prices," says Brown. Sales of big cars are collapsing; Americans are cutting down on driving. The airlines are scaling back flights.

We've learned another important lesson from the housing market: The longer prices stay stratospheric, the worse the eventual crash - simply because the higher the prices and bigger the profit margins, the bigger the incentive to over-produce. __Source

But why have oil prices shot up so quickly? 1. Huge recent demand from China, India, and other emerging nations. 2. Recurrent, transient political turmoil in oil producing regions 3. National oil companies that have no incentive to modernise production as long as prices remain elevated 4. The reduced value of the US Dollar causes oil prices to rise relatively 5. A speculative bubble driven by index fund/pension fund investing.

Much of the rise in oil price is the result of activity on the New York Mercantile Exchange, the energy exchange. This is activity by index funds and pension funds that are investing in oil futures, not for direct use but as financial assets for profit. That contrasts with activity by oil producers and consumers who buy and sell to smooth out fluctuations in price and delivery.

These financial institutions – index funds and pension funds – are neither buying oil nor selling it. They are passive investors in commodities. They have invested $260bn (€169bn, £133bn) in commodity markets, compared with $13bn just five years ago. Much of this money is in oil.

...The best way to counter speculation is to make it less profitable. Step one is to protect the regular traders in the real oil economy (those who intend to close their positions by making or taking delivery of oil) and charge them a lower margin than those who have no intention of plying the oil trade. The purely financial traders must be made to pay a proper price for their speculation. This can be done simply by increasing the margin that they have to put down to trade as open interest, from the current 7 per cent to about 50 per cent. __FT

This huge speculative bubble is often overlooked due to peculiar bookkeeping allowed by a government loophole.

Even though they are speculators, they are not included in the data as speculators. Because they get their exposure from an investment bank, they are ultimately listed as a commercial. In total, they represent an enormous part of the commodities markets. But they are providing liquidity, so what's the problem? They are not actually hoarding the commodities. The price is still set at the spot price. But.

But that is not the whole story. They are making it difficult, if not dangerous, to short the market. When massive buying comes into the market, it moves the market and sends the signal to the market that prices are rising. Momentum players move in, and prices rise some more. __Source

Prices continue to rise more, and more, and more . . . because in effect, a ratchet has been inserted into the mechanism allowing quick price rises, but working against falls in price.

Hiding as commercial accounts, thru a Commodity Futures Trading Commission exemption to avoid speculative position limits, these institutional-investors use commodities index-futures to hold positions in oil. But not as traditional buyers of oil would, but as financial speculations. This feeds the demand side, without ever, actually demanding oil. Eighty two percent (82%) of WTI futures [net increase from 01/01/03 to 03/12/08] was purchased by institutional-investors [Testimony of Michael Masters before the Committee on Homeland Security and Governmental Affairs, U.S. Senate, p.3, May 20, 2008].

He further notes that Index Speculators “never sell” their positions but, “roll their positions by buying calendar spreads.” True, their positions are closed but then they are continuously reopened. According to Michael Masters the increase in institutional-investor position's on WTI futures increased 539% over five and one-quarter years [102% per year on average]. Momentum in price attracts attention and so more and more institutions enter trades, ratcheting the price upward. How can experts claim that such an influx of non-traditional buyers into index-futures, at this magnitude, does not effect spot prices?

Answer: they cannot. The pricing signal that index-speculators are sending to the spot market is a false signal. Their financial demand is only for oil futures, not barrels of oil. For persons to claim it is really the huge demand [2% per year + marginal decline] or supply disruptions [that never happen] is to be otherwise engaged. __Source

Even George Soros is concerned about the level of speculation by pension and hedge funds in the oil market. Soros recently testified before Congress on the issue. Now Senator Joe Lieberman of Connecticut is threatening to close down these big money price ratcheting speculators with the power of federal legislation. Given the paper profits these fund managers must be showing right now, imagine their concern over Senator Lieberman's comments.

What should you as a small investor do? Stay out of it. Oil prices may finally tip the US into a recession before all of this is settled. If so, the current bubble would no doubt pop, but it would not be long before the onset of the next bubble--unless substantive reforms are made in US fiscal policy, Federal Reserve policy influencing the value of the US dollar, and CFTC (Commodities Futures Trading Commission) policy in regard to "long-only" index futures.