The FACTS about rising commodity prices - nearly 100% caused by pure speculative buying and hoarding: http://seekingalpha.com/article/78264-commodities-prices-speculation-exposed
Sorry, but thats bullshit. Guy sounds like a total shill for Congress. Second, we're in a massive liquidity boom since 2000. Every major economy printed vast amounts of dollars, euros, yen and pounds then each economy could 'absorb'. The result is a Fiat economic BOOM>inflation> speculative excesses (sector bubbles). Author is putting the blame on the end effect and not the catalyst itself. Of course, the scape goat in this case happens to be something Congress can regulate, and therefore, make themselves out to be heros.
We abuse use of oil. Cut back. Sell or junk your vile SUV. Buy a bike, send a Sheik to the poorhouse.
If we dump oil for the bicycle, our economy will be in ruins, so Mr. Sheik can own us with his petrodollars made by selling oil at top dollar to the gleeful Chinese.
I don't give a s*it what anyone says. The price of oil or anything else can only go up if there are those willing to pay for it, or are forced to pay for it. I believe 100% that a huge % of the rise in oil is due to frontrunning by specs. They can trade among themselves and run the price to 1000 a barrel, and you imbeciles would say its the free market. You waste my time.
The attachment you cite basically proves my point. Oil is trading at prices today on a model that assumes supply growth doesn't meet demand through 2030 (22 years consecutively, from now). There is no shortage of oil at present. Period. End of story. Show me a credible source that states there is a current shortage of oil. Moreover, any draw downs in the OVERSUPPLY of crude are mainly attributable to the buying of futures, with the purchasers not taking ACTUAL PHYSICAL DELIVERY OF THE OIL, thus having the same effect as TAKING THE OIL OUT OF THE SUPPLY CHAIN. No shortage of oil. Plenty of supply. Prices have run on pure speculative buying. http://www.star-telegram.com/ed_wallace/story/659081.html http://hsgac.senate.gov/public/_files/052008Masters.pdf
I agree ByLo, and we have had similar discussions in other threads ad nauseum. In one of these threads i noted that increases in consumption of the physical product is a relatively small part of the current demand equation driving oil prices higher. It is speculation in the broadest sense. I am including under the term "speculation" the buying of oil stocks, oil options, and oil futures as hedges against inflation. Some have forgotten that commodities are one of the classic hedges against inflation, and in times of excessive inflation one sees commodity prices increase. It is a double whammy, so to speak, because not only would commodity prices, along with the prices of everything else, rise because of inflation, but commodity prices rise even more because demand for them increases disproportionately because of inflation. One effect feeds the other as in a classical feedback mechanism. This time is little different than in times past though: the speculative fervor seems even greater this time round. Those who don't understand this, because they see that consumption of the physical product has increased only a little while the price has risen a great deal, naturally suppose there is some evil force at work. They would be much better off if they themselves bought oil stocks, options, and futures, and thereby hedged against the inevitable. P.S. There is, of course, an evil force at work, but not the one they suppose. Rather it is a very expensive and wasteful war financed entirely with borrowed money!
Yeah, in 2030 that's the projection. Doesn't mean prices should rise with this speed unless there's speculation.