Here’s a little something from MSNBC on what is to date the most radical proposed solution to the oil price crisis: Banning institutional investors.
And a fairly balanced Fortune piece that examines all of the factors behind the oil run-up. It’s still pretty difficult for me to buy the “supply and demand” canard this piece lands at, surrounded by accounts of declining demand, but it is thought-provoking.
At any rate, my take is a rush to act in Congress is probably a rush toward exacerbating the problem. What’s your feeling?
6 Comments
To the extent that supply/demand is influence the actions proposed will make things worse. We know that even with new drilling supply will only increase slightly. However, the message we are sending is that we plan to do NOTHING on the demand side of the equation.
We would be much better off if we acted swiftly to improve energy efficiencies, use more wind and nuclear, and conserve.
It is interesting to note that when Bush gave his speech oil prices shot UP.
“It is interesting to note that when Bush gave his speech oil prices shot UP.”
Well hell, put an oil man in the white house and one in the vp slot, and WTF did people THINK would happen?
Prices would go down?
hehehehehehheh. Only in Bizzaro World…
Yet statistic after statistic indicates demand is down. Plus, there are some local refinery employees who question the supply-side issue as well. And none of that takes into account growing evidence that speculation is fueling at least part of the price run-up
So from this perch, I’m still looking hard at speculation as a culprit. There are too many vagaries in the supply chain, and too many experts skeptical of its impact, for me to buy the supply and demand argument today.
Heh Bill, so I repeat. Put a coupla oil men in charge and WTF did anyone expect?
I agree about the supply/demand hoax as well. I used to live in the Beaumont/Pt. Arthur area and my pals there on refinery row say the same thing. Whatever shortage there is on the supply side is manufactured. Seems that at least down there, the “invisible hand” isnt so invisible.
I think speculation is also the biggest culprit in the run-up in grain prices. Yes, world stocks have been at thirty year lows and world wide demand is up. However…
Wheat here is nine freakin’ dollars at harvest time! Usually this is when we see our lowest prices because everyone knows harvest is either in progress or about to start. And harvest quantities for wheat look good this year. Not great, but good.
So.. even the grain blogs like DTN say this run-up is the result of speculation, not users stocking up.
And what goes up… will come down. With inputs at triple of last year’s, mostly due to petroleum related products from tires to fertilizer to fuel, the farmers out here have much more at risk in every crop. Yeah, insurance and gummit programs mitigate the risk, but not entirely.
I feel a repeat of the late seventies, early eighties coming on. High prices, high inputs, land prices out of control, interest rates on the rise, credit crunches from failed or shaky financial institutions…
… and you have the perfect storm for auctions on the courthouse steps in 3-5 years.
Remind me sometime to explain my “airstream trailer theory”.
In short, there will be NO people out here. Just big corps owning MILES, not acres, of land. And it will all be farmed by 24 year old boys looking for adventure, like fire spotters and crab fishermen.
And they will be living in airstream trailers, with groceries, parts and supplies brought in three to four times per year.
And every trailer will be 100 miles apart.
Mark my words…
Unless the water runs out before then.
Oh, and I chose 100 miles for a reason. Colby is about 100 miles from Hays, Hays is about 100 miles from Salina. Goodland is about 100 miles from Phillipsburg, which is about 100 miles from Topeka. Dodge City is about 100 miles from Hays, and about what, a little over 100 miles from Wichita…
You get the picture. It isnt exact, and I hope like hell I’m wrong, but you dont need a crystal ball or handwriting on the wall to see how this will all shake out.
When the water and people are all gone, I have two words for ya.
Buffalo Commons.
hee hee hee.
And my “perch” as you said, is at ground zero. I’m not likin’ the view from here either! Even if I did lease my ground for oil last week…