Monday, June 30, 2008

Oil at $143 barrel

Oil prices hit another all-time high. It looks like $5/gallon is a very real possibility.

But, let me offer a more positive hypothesis. Oil prices are going to collapse as soon as Congress agrees to regulate the largely unregulated commoditites trading market. I believe - as many believe - tht there is a significant bubble in that trading market. Speculators are pouring money into oil but the price has far overshot demand.

The other MAJOR factor is that the dollar has collapsed and remains weak. Until we have a President and Congress who are committed to controlling spending and getting the finances of the U.S. government in order (which will require some tax increases), the dollar will not recover.

6 comments:

dasichist said...

What needs to be done is to close the Enron Loophole: http://marketplace.publicradio.org/display/web/2008/06/16/cftc/

Anyone know why we don't hear about this in the media?

Rob said...

I agree. McCain used to talk about closing it until he became the Republican nominee.

It is going to get closed if Dems are in charge.

J&K'sDad'sfriend said...

This reminds me of the story of the groundhogs and the angry father.

The groundhogs thought they could scurry around the yard, lounge in the sun on the gazebo, dig holes (aka, "escape routes") and generally enjoy a life of procreation and unlimited food with no predators. The angry father grew tired of hearing his wife complain about the safety of the children if a groundhog became too aggressive in protecting its young.

The angry father ordered a trap from the Fur Harvester's Trading Post and caught each of the four groundhogs that lived beneath the gazebo within three days. Despite the VA ordinance that caged groundhogs must be executed, the angry father allowed them to live and relocated them and thereby returning tranquility and prosperity to the home.

This story is applicable, because the groundhogs represent the Democrats and the angry father represents the GOP. The quicker we get the Democrats out of the house and senate, the quicker our financial markets will return to a period of tranquility and prosperity.

Not a sermon, just a thought....

Rob said...

What is your basis for that comment? It flies in the face of all facts over the last 20 years.

Seriously, if you want to discuss fiscal matters, let's do that. Because it appears to me that you have a complete misunderstanding of the fiscal policies and realities of the President and Congresses over the last 2 decades.

J&K'sDad'sfriend said...

During normal, peaceful and prosperous times: Supply side economics, smaller government, states empowered to handle social issues, and lower Federal taxes.

However, taxes and government spending need to be increased during periods with extraordinary events, such as: terrorist attacks within our borders (actually planned with knowledge of the Clinton administration), war to ensure that other people are free to establish democracy and religious freedom (consistent with other wars vs. dictators and communists), disasterous huricanes and tsunamis (Don't Fool With Mother Nature), large company executives committing fraud and tearing apart the financial markets (really started in the Clinton era), and escalation of frivalous lawsuits (too many lawyers and not enough teachers and doctors).

The Democrats need a stronger vision and message than "change for change's sake" and "the Bush Administration was terrible" for navigating through these extraordinary times.

Rob said...

Obama has very specific plans if you want to go through them.

Even if you believe that the Dems offer nothing (which is categorically false), please tell me what specific plans the Republicans are offering.

Again, if you actually want to take time to dig into numbers we can do that. Because you don't seem to actually understand the realities of Dem and Republican leadership in the White House and in Congress over the last 20 years.