Beating Off Myths
The world is vulnerable to additional crisis. Institutions are hedging the weakness of the dollar by buying oil. When the oil price bubble bursts, there will be additional strains on the financial system as traders scramble to unwind positions or cover losses. Lawmakers and regulators should impose additional equity requirements on the commodity markets immediately.
The Price of Oil (This New York Times article published in 2005 is even more timely now.)
Oil Price History and Analysis (WTRG Economics)
“When speculation has done its worst, two and two still make four.”
Quotation from Samuel Johnson
“Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices.”
Quotation from Alan Greenspan
“I guess I should warn you, if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said.”
Quotation from Alan Greenspan
July 17th, 2008 at 2:09 am
*ahem*…does beating off have the same connotation for you as it does for me.
I can be so puerile at times.
*giggle*
Dolces last blog post..Running to Stand Still*
July 17th, 2008 at 3:36 am
Alan Greenspan is a twat
nursemyras last blog post..sleight of snatch
July 17th, 2008 at 3:52 am
That last quote from Greenspan says it all…
John J Savo, the Authoring Auctioneers last blog post..Applying the F-Word
July 17th, 2008 at 4:33 am
Indexed Investment Funds which give retail investors the opportunity to bet on the oil price are encouraging gambling; a reduced oil price affects those individual investors, (not the Institutions) who will then stand to loose. However I also think lawmakers need to investigate whether speculators are manipulating or influencing the price of oil, additional to the SEC’s recent initiative on illegal naked short selling of financial stocks.
But it is the continued dollar weakness as mentioned in your post which is driving investment in commodities, particularly in gold and oil, with large flows from the large sovereign Asian and Middle Eastern wealth funds seeking a hedge against your falling dollar.
It’s fundamental to policy for a recovery to occur in the dollar and to end sediment it will just keep falling. A rise in the dollar will very likely bring about a corresponding fall in commodity prices and a fall in the price of oil. Supply and demand determines the medium and long term.
Best wishes
Lindsaylobes last blog post..What’s going on in the USA?
July 17th, 2008 at 8:39 am
Ok. I try to be a smart person, as much as I can be. But every time someone starts talking economics, as much as I WANT to follow it, my eyes, ears, and my brain cells glaze over and freeze. Completely.
So please bring on the myth, which I hope would be an easily understood story about the mystery of economics. Just make sure it is one I can place my full faith in it. It can be true and still easier to understand, can’t it?
July 17th, 2008 at 12:46 pm
The crises is really everywhere…
you are so right..
a kiss
Kiras last blog post..The last most inspiring look…
July 17th, 2008 at 3:35 pm
How truly asked! Yes, it’s a myth of the Holy Market and the Holy War. Whoever drinks my oil, will be saved. I don’t mean this in a blasphemic sense, (Jesus knows) but oil can be seen as the “holy” devil’s blood. But if it weren’t oil, mankind would choose something else.
Erik Tjallinkss last blog post..Religious doubts…
July 17th, 2008 at 7:22 pm
We’re looking at the last giveaway by the current administration to their buddies in the oil industry. The myth they’d like everyone to believe is that they’re looking to benefit us.
July 17th, 2008 at 8:13 pm
i was just in dubai, where its locals’ lives have completely changed due to discovery of oil back in 60’s. imagine that…back home, pumping gas into my car is my least favorite thing to do. i see my hard-earned $$ slip, slip, slip into my ride. **sigh**
wendivas last blog post..DIOR’S FLOWER WOMEN
July 17th, 2008 at 9:18 pm
Hi, Seraphine: I don’t believe in the “supply and demand” argument people use. Speculators such as T. Boone Pickens have conspired to drive prices up. That’s my take. Having said this, I do believe we can drill here at home with the utmost care that would be respectful of the environment. When I was on the board of a Rainforest preservation group, our Executive Director put it this way. When you go to the grocery for a box of cereal and a half gallon of milk, do you drive through the front of the building and out the back? Or do you park and walk in, select your items, pay the cashier and walk out? Same goes for extricating oil”. I believe this is sound.
July 17th, 2008 at 10:06 pm
lol michael, no i really do drive in the front door and out the back. i wear a bib so nobody will notice.
July 21st, 2008 at 1:53 pm
The infrastructure of this country is going to shit. The Liberal wackos who want the earth to return to its origins at any cost, including you and me, have somehow been in control of enough of the govenment in the last 50 years that we havent been keeping up with the deteriation of our old infrastructure. Everything is fallng apart and then there’s the fact that we have no reason whatever to be in the middle east right now. There is plenty of untapped supply right here at home. Right off our coast line there is a huge deposit that is currently being exploited by China and a few other countries that we could easily drill for ourselves and keep others out. Then you have Alaska. plenty of oil up there as well. So why are we still sacrificing our young soldiers over in the middleeast if we dont need to? Because of the people who keep spouting feel good nonsense like drilling in alaska will cause the caribue to dissapear. What utter nonsense. When they put in the alaska pipe line this same argument was spouted by equally stupid people and were proven wrong when the caribue population grew to such extremes from the heat of the pipes they had to start culling the heards to keep them from destroying themselves from overpopulation. i truly wish all these idiots would just shut the hell up and let us do what makes sense for a change.
August 17th, 2008 at 1:30 pm
Thanks for your article, Now there is more reason to comment than ever before! This is a great fir for our project!