In the mad rush to blame speculators for high oil prices, our solons in Washington have inadvertently revealed a U.S.-centric, 20th century mindset.

I’m sure Sens. Carl Levin and Dianne Feinstein think they’re enlightened types, far beyond any sort of “ugly American” mentality. But that’s exactly what they betray with their notion of closing the “London loophole.”

Says Levin, “The [Commodity Futures Trading Commission] didn’t have good information about who was trading how much US oil when, and whether traders subject to US speculation limits were circumventing them by trading in London. That’s why I and my colleagues have repeatedly introduced legislation to close the London loophole.”

The Levin-Feinstein bill would order the CFTC “to ensure that energy commodities traded on foreign exchanges using trading terminals located within the US are subject to the same speculative trading limits and reporting requirements as energy commodities traded on US exchanges,” reports the Financial Times.

Of course, not only is there a London loophole, there’s also now potentially a Dubai loophole. And in time, perhaps a St. Petersburg loophole. And if the Iranians can ever get their heads out of their posteriors, a Tehran loophole, and if Hugo Chavez can do likewise, a Caracas loophole. Soon there will be a big bold world of people outside the United States, trading in exchanges outside the United States, perhaps using currencies other than that of the United States.

And as oil prices rise all the while to $150 and $200 and even higher, Sens. Levin and Feinstein will still be fussing and fuming about transactions through U.S. terminals that will account for less and less of the world’s oil trade. What will they do then? Maybe they’ll sue the operators of the international bourses, to go along with their suits against OPEC. Yeah, that’ll bring back $2.00-a-gallon gas.

Source: The Ugly Americans