As a barrel of oil took a quick dip to $136 bucks…you might think the great soaked consumers would be standing on their cars cheering! Hey, we finally got a $5 drop…..whew….how long did that take? But what about tomorrow? What about a week from now? How about next month?
T. Boone Pickens, Pat Buchanan and Newt Gingrich…all think we need to change our oil consumption. They all want Natural Gas, Bio-Fuels, Wind and more Fossil drilling! They all think that the “Oil Investment Speculators” have had little or nothing to do with the rapid rise in the cost of a barrel of oil during the year 2000. What are these guys smoking? Have any of them addressed the so-called “Enron Exception” – attached to Farm Bill in 2000? Well, Hank Paulson our Treasury Secretary, Ben Bernake of Fed, Chris Cox, the Security and Exchange Commission Chairman and Jamie Dimon of Chase all seem to think that a change of Regulations is now required.
The Europeans are “freaking out” and have made steps to limit the “pure speculation” that we are experiencing here in the United States. They seem to believe that having Goldman-Sachs, Lehman Bros. and Chase own all the world’s black gold….is probably not in their better interest. In fact, it is not in anyone’s best interest – except the Brokerage Agents and Pension Funds that have been pumping their cash into the market.
Well, the heat is on….and these greedy twits are busy covering up their ill gotten gains…as fast as humanly possible. These guys are no dummies, so we still need to track their activities. They are hoping they can hide out until after the election or maybe even until 2010! “Market Manipulation”…ever heard of it? It is going to cause a big bunch of dominos to fall and cost the consumer more in energy costs than can be calculated on a standard adding machine! What about the Oil Companies? Don’t look for those guys to be going out of business – anytime soon!
People talk about a lack of a “Energy Policy”! What does that mean? Does it mean that the United States refuses to sign long term contracts with various countries for a “stabilized price over a period of 10 years”? We did it with Mexico in the 1980’s! We bought every drop of Mexico crude for 10 years at $10 dollars a barrel. Have things changed that dramatically? If so, who was watching the store for the last 28 years? Can we as a nation secure a steady oil supply from a variety of countries? What percentage? How much would we then have to drill for? We would know wouldn’t we? They could not fool us….could they? We have computer generation to launch a manned mission to Pluto…..but we can’t figure out how much oil we need for next week?
Fannie Mae and Freddy Mac secure home loans for people. How bad is the liquidity issue? They are going to have to borrow $75 billion dollars from the Fed so they can stay in business. The Foreclosure issue is mounting and we have yet to see anything but the tip of the iceberg. If we think it is bad in the USA, take a look at the European Community. Even in a Socialistic Oligarchy they are having trouble finding funds to build much of anything. Thank goodness they tend to earmark for historic monuments and such – otherwise, those things could just be falling apart in front of our eyes!
How long will these doldrums last? Until the greed of the “Oil Market Speculators” is satisfied. How long will rising unemployment last, or falling retail sales, or the crash of the auto market, or the crash of the real estate market, or the lack of confidence we have in government to solve our problems? Hey, maybe they finally got the message! Maybe, just maybe they are going to turn off the “Greed Faucets” and retrench for a minute! Tomorrow is another day and we can look to see the price of oil, just like everyone else!
Maybe this is just the Beginning of the Middle….and soon we will know that the Beginning of the Middle….was really about the end of the Middle and the Beginning of the End! Maybe! In the meantime, we suggest that “longterm oil contracts” start to become a priority for those involved! What this means of course is that we need to quit sending our oil overseas to Japan, North Korea and other unmentionable locations! We really can’t afford to send our oil overseas…can we? Who is responsible for this? Oh, the Congress! They want to put an SUV in everyone’s garage…that’s how in touch they are!
Not sure I’m following all the threads of this, but to me blaming commodity speculators when price fluctuations become a hardship is an old populist trick that goes back to the 19th Century and panders to people’s feelings of envy, confusion, and distrust in a time of perceived crisis.
Some factors are in our control, like how the government is ruining the value of our currency with deficit spending, but the overall picture is that demand is up with the rise of the developing world and we can blame and regulate and fingerpoint all day and the price will still be high because it should be high. That’s how the price mechanism pushes us to do what we’ve always known we should do — conserve and develop alternatives.
We don’t need politicos and celebrities to tell us to develop alternatives. We just need higher oil prices so it becomes profitable.
“…because it should be high…” That is without a doubt the most succinct rationale for the energy crisis I’ve ever heard. Sure more demand will raise prices, but not as fast as speculation about future demand. I cant believe you think speculation has no effect. You are right about the benefit of higher energy costs – it makes alternative production methods economically viable. Who wouldnt have solar generating roofs if it didnt cost more than it was worth to put one in? Well keep raising up the price of energy and pretty soon the things that were to expensive to start last year will be viable next year.
Do people realize that every speculative trade has two sides – a seller and a buyer? For every person betting that the price will go up, there is someone betting that the price will go down.
This is very different from the first Bush energy crisis in California, where it turned out that the people who wrote the deregulation bills had figured out exactly how to manipulate the peak prices, and they were aided and abetted by the failure of Republican cronies at the FEC to do their job, while Bush’s friends at Enron engaged in rank criminality.
With oil there has been a flat supply of liquid fuel for three years with a steady increase in demand, a dollar dramatically weakened by massive Bush deficits, and added risk premium caused by our invasion of Iraq and destabilization of the mideast.
Blame Bush, Cheney, MCain, Rohrabacher, and the rest of the people who have wrecked our economy and don’t be fooled by their new lies.
*Good comments all….however, do not get caught up in the “Supply and Demand” nonsense. How about water? Is it reasonable to expect that water is affordable…to flush your toilet….to cook your veggies? This is why they call them Public Utilities and they along with Electricity and Natural Gas are regulated to insure affordability and access to these items. So, as a true Libertarian….would you say…..that “gasoline is not a necessity”? That being said: Using your premise! Everyone could go into the oil business and sell their refined gasoline for any price they could get. Sounds very logical doesn’t it? The problem is when “Speculators” corner the market. Remember the Hunt Bros. when they “cornered the Gold Market”…bought it all up and refused to sell….until the price rose from $225 dollars an ounce to $848 dollars an ounce. Then they sold like nobodies business. How much did the Hunt Bros. make in the 1979-1980 Gold Rush? Nobody is talking! Why would they? Thank God we didn’t need Gold to make our Automobiles roll on the highways of America! Those “speculators” are doing their best to pretend they are the Hunt Bros.