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No, we won't have a global recession if gas hits $1.84 - but if we have a global recession gas may indeed hit $1.84 (that was the only reason it was at $1.84 in late 2008). It certainly wasn't that low in 2006 or 2007 - but it sure collapsed when the bottom fell out of the economy in the late summer and fall of 2008. It's called supply and demand - maybe you should read up on it. Rotten economy = low demand, Stronger economy - greater demand. Lower demand = lower prices, greater demand = higher prices.
Ken
Supply and demand did not take oil from $145 a barrel to $38 in such a short time. It happened because of irrational markets.
Location: Georgia, on the Florida line, right above Tallahassee
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Quote:
Originally Posted by gretsky99
I point the finger at Obama and the leftwing environmental fanatics!
We understand you want Barry to go all communist and DICTATE the price of goods and services. Why do you want to live in a communist country under a communist president?
Supply and demand did not take oil from $145 a barrel to $38 in such a short time. It happened because of irrational markets.
The markets ARE "supply and demand". How much folks are willing to pay for a particular supply of a commodity is what DRIVES the markets. Now you can certainly argue that the DEMAND is "irrational" at times, but it's STILL DEMAND. The price doesn't go up if there is no demand (or at least the expection of demand). Likewise the price doesn't go down unless there is an expectation that supply will exceed demand.
I do agree that oil prices dropped wayyyyy too low in the last months of 2008 - as did stocks. All that was driven by irrational fear. That's why the old name for such financial collapses was "panic".
The markets ARE "supply and demand". How much folks are willing to pay for a particular supply of a commodity is what DRIVES the markets.
Now you can certainly argue that the DEMAND is "irrational" at times, but it's STILL DEMAND. The price doesn't go up if there is no demand (or at least the expection of demand). Likewise the price doesn't go down unless there is an expectation that supply will exceed demand.
I do agree that oil prices dropped wayyyyy too low in the last months of 2008 - as did stocks. All that was driven by irrational fear. That's why the old name for such financial collapses was "panic".
Ken
Irrational markets drove the price to $145 also. The demand has not fallen from fundamentals that would call for gas at $4.00 to down to just over $3.00 now. Irrational markets should not have this kind of control over people's every day lives.
Irrational markets drove the price to $145 also. The demand has not fallen from fundamentals that would call for gas at $4.00 to down to just over $3.00 now. Irrational markets should not have this kind of control over people's every day lives.
I agree that it shouldn't have that kind of control, but it does. The markets - whether you are talking about stocks or commodities - are based on the expection of what the market will bear. That's the way they work (whether it should be that way or not). Investors don't buy stocks or oil futures based on what those things are worth today, but rather the expectation of what they will be worth tomorrrow. This has a HUGE impact on the price of gas. It's not "end user" (or consumer) demand that drives gas prices, it's "investor" demand that drives gas prices. It's still supply and demand - just not at the consumer level.
And as I said, I agree it shouldn't be that way, but it is, and it always will be.
Irrational markets drove the price to $145 also. The demand has not fallen from fundamentals that would call for gas at $4.00 to down to just over $3.00 now. Irrational markets should not have this kind of control over people's every day lives.
I agree that it shouldn't have that kind of control, but it does.
It doesn't have to.
Quote:
The markets - whether you are talking about stocks or commodities - are based on the expection of what the market will bear. That's the way they work (whether it should be that way or not). Investors don't buy stocks or oil futures based on what those things are worth today, but rather the expectation of what they will be worth tomorrrow. This has a HUGE impact on the price of gas. It's not "end user" (or consumer) demand that drives gas prices, it's "investor" demand that drives gas prices. It's still supply and demand - just not at the consumer level.
And as I said, I agree it shouldn't be that way, but it is, and it always will be.
Ken
People are getting restless.
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Why do you want to live in a communist country under a communist president?
