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Hedge funds, pension funds and other speculators have been blamed by many lawmakers and some energy experts for doubling the price for crude oil in the last year. The Bush administration disagrees, saying high prices are the result of world oil production not being able to keep up with growing global fuel demand.

The bill easily cleared the House in a 402-to-19 vote. The Senate must still take up the measure.

The legislation, sponsored by Rep. Collin Peterson of Minnesota, the chairman of the House Agriculture Committee, would require the CFTC to act against “sudden or unreasonable fluctuations” in energy futures prices and other trading activities that “prevent the market from accurately reflecting the forces of supply and demand for energy commodities.”

“It opens up a set of new tools they are not using,” said Maryland Democratic Rep. Chris Van Hollen, referring to the agency’s emergency powers.

“The American people should not be punished at the pump for the actions of oil speculators,” said House Speaker Nancy Pelosi.

That warning from aviation experts has prompted some industry leaders to call for re-regulation, something considered almost heresy until now. Others are urging Washington to do more to rein in the oil speculators pushing up fuel costs.

But there is agreement among airline officials and analysts that Washington and the two presidential candidates need to recognize the severity of the crisis and take some action now to avert an economically crippling collapse in the near future.

“Unless something is done to move toward some kind of fix, we’re going to see every one of our major airlines in bankruptcy,” says Robert Crandall, former chairman of American Airlines. “If that isn’t enough of a crisis to alert everybody, then I don’t know what it will take.”

As a result of the spike upward in oil prices, almost every major airline is now losing millions of dollars each quarter.

Unless the price of oil comes down, most are expected to run out of cash by the end of this year or the beginning of next. In a bid to stave off bankruptcy, they’re already retrenching. They plan to lay off an estimated 25,000 employees, park hundreds of planes, and cut the number of flights they offer.

The Reuters-Jefferies CRB Index, one of the broadest indicators of commodities demand, rose more than 2 percent to a record of 463.41 points as even orange juice — a normally tepid market — rallied.

While the jump in oil was over worries that producer Libya may cut back on exports even as consumer nations were crying for more supply, markets like gold and copper were driven by the dollar’s fall after the U.S. Federal Reserve decided to keep interest rates flat despite higher inflation.

The dollar had run up against other major currencies earlier this month on expectations of an imminent U.S. rate hike. On Thursday, it stood at a near three-week low against the euro.

“The Fed’s in a difficult spot. They’re kind of damned if they do and damned if they don’t,” said Michael Gross, a futures analyst at Florida’s Optionsellers.com, referring to the Fed dilemma on rates as inflation climbed.

The damage could rise or contract, depending on weather conditions for the rest of the growing season in the United States, the world’s top exporter of corn, soybeans and wheat, the American Farm Bureau Federation said.

The flood damage in the Midwest over the past two weeks has lifted prices for U.S. corn, used for food, renewable fuel ethanol and animal feed, to a record high above $7 a bushel, up about 85 percent since the end of 2006 as of Wednesday.

The AFBF said leading farm state Iowa accounted for about half of the damage.

“Wet weather and flooding create issues, as farmers are unable to plant their crops,” said AFBF senior economist Terry Francl. “The crops they do plant do not sprout and grow, resulting in few acres harvest.”

There was something extremely familiar to me about this week’s events. The way they closed down the whole of Whitehall for George Bush’s visit reminded me of how, in Havana, they close the main highway every time Fidel Castro crosses from one side of town to the other.

There was also something unpleasant about the way many in the BBC turned the discussion away from the loss of civil liberties in Britain and instead began to present David Davis as an egotistical oddball, pulling a clever stunt simply to spite the leader of his party. Soviet TV attacked dissidents in the same way. This kind of media character assassination is even more reprehensible because once you destroy a politician’s reputation, you might as well put him down – like a racehorse with a broken leg.

And then, while Labour berates African nations for not adopting Tony Blair’s gold standard for liberal interventionism, Labour itself avoids holding the referendum on Europe it promised.

One gets the feeling that the current crop of neo-monetarist technocrats in power in Britain regard see the whole democratic processes as an irritating stunt, not just David Davis’s upcoming by-election. Certainly Labour politicians show very little respect for the electorate. Any appeal over their heads to the willful and ignorant population probably feels like insufferable interference to them.

The court’s 5-4 ruling struck down the District of Columbia’s 32-year-old ban on handguns as incompatible with gun rights under the Second Amendment. The decision went further than even the Bush administration wanted, but probably leaves most firearms laws intact.

The court had not conclusively interpreted the Second Amendment since its ratification in 1791. The amendment reads: “A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.”

The basic issue for the justices was whether the amendment protects an individual’s right to own guns no matter what, or whether that right is somehow tied to service in a state militia.

Writing for the majority, Justice Antonin Scalia said that an individual right to bear arms is supported by “the historical narrative” both before and after the Second Amendment was adopted.

The Constitution does not permit “the absolute prohibition of handguns held and used for self-defense in the home,” Scalia said. The court also struck down Washington’s requirement that firearms be equipped with trigger locks or kept disassembled, but left intact the licensing of guns.

In a dissent he summarized from the bench, Justice John Paul Stevens wrote that the majority “would have us believe that over 200 years ago, the Framers made a choice to limit the tools available to elected officials wishing to regulate civilian uses of weapons.”

Gold for August delivery rose $29.70 to $912 an ounce on the New York Mercantile Exchange.
The precious metal earlier hit an intraday high of $914.50 an ounce, its highest level since late May.
On Wednesday, gold futures moved higher in electronic trading after the Federal Reserve kept interest rates unchanged but said that upside risks to inflation have increased.

Gold prices had closed regular trading with a loss of 1%, tracking weakness in the oil market ahead of the Fed decision, which came shortly after metals trading on the Nymex ended.

“There is the risk that while the Federal Reserve has to an extent ‘talked the talk’ regarding inflation, it is failing to ‘walk the walk’ by raising interest rates in order to combat the real threat posed by surging inflation,” wrote Mark O’Byrne, executive director of Gold and Silver Investments Ltd., in a research note.
Inflation in the U.S. remains higher than interest rates and continuing negative real interest rates could lead to an “inflationary spiral,” he said.

In a 5-3 decision, the justices reduced punitive damages from $2.5 billion to about $500 million for 32,000 commercial fishers, food processors and Alaskan natives whose livelihoods were damaged by the 1989 tanker spill, the worst in U.S. history. The court said Exxon’s conduct had not been motivated by malice or greed and noted that the jury had awarded the plaintiffs another $500 million as compensation for their losses.