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05-12-2008, 09:47 PM
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2,539 posts, read 3,937,665 times
Reputation: 998
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Like the housing bubble, the oil bubble will burst also. Nothing will keep going up out of control like it is. It to will crash also. Either the "future traders" will pull the money out or OPEC will drive down the market by "opening up the spigots".
Why isn't anyone questioning why the market allows the traders to drive the prices up. Someone else, besides the Oil Companies and OPEC are bleeding us all?  Who are these people? |
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05-12-2008, 10:05 PM
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Location: San Diego California
6,796 posts, read 7,001,677 times
Reputation: 5189
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I would like to think we are near a top on oil, but I fear that there is a speculative spike in the works before the price collapses. I do not have any proof of it, but bubbles usually are enginered to get the masses involved, in order to get most of their money before they pull the plug, and I do not see many people getting involved in oil speculation in spite of the incredable run up. I don't know, maybe they are reeling so badly from the housing crash they don't have anything left to speculate with. Perhaps they will create a way to allow people to gamble their 401K's in commodities, yea, that would just about finish off most people. But then they wouldn't do that to their own people would they?
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05-12-2008, 10:05 PM
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Location: America
6,993 posts, read 16,740,993 times
Reputation: 2092
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Quote:
Originally Posted by bnepler
Like the housing bubble, the oil bubble will burst also. Nothing will keep going up out of control like it is. It to will crash also. Either the "future traders" will pull the money out or OPEC will drive down the market by "opening up the spigots".
Why isn't anyone questioning why the market allows the traders to drive the prices up. Someone else, besides the Oil Companies and OPEC are bleeding us all? Who are these people? |
1. you need to find out what a bubble is, this is not a bubble
2. its called inflation |
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05-12-2008, 10:07 PM
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Location: WA
5,606 posts, read 23,948,649 times
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Obviously the strong demand for oil and weakness in the dollar has brought in more speculators so the price today has some premium over what supply and demand would normally dictate…. analysis by rational experts estimate that premium at as much as 25%.
The reason oil is not like many bubbles is that supply cannot easily be expanded (OPEC is pumping at the high end of their capacity) and demand continues to expand.
Even with an exodus of speculators and good strengthening of the dollar few expect prices to drop below $90.
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05-12-2008, 10:19 PM
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Location: America
6,993 posts, read 16,740,993 times
Reputation: 2092
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cdelena
that last sentence says it all "good strengthening of the dollar"
The dollar is weak because the govt is printing money in order to pay debts. That in turn weakens the dollar because there is so much in circulation. Think of it in terms of gold. Gold is only worth something because it is a rare thing and not in huge abundance. If there was billions of gold chunks out there readily available, gold wouldn't be a precious metal. Wellm the same is true of the dollar. When you print a truck load of the stuff (which they are doing to pay debts and provide liquidity to banks) it isn't worth as much. When it isn't worth as much, people will want more dollars for their goods. Hence the rise in oil prices and other goods. Once the govt has inflated its way out of the current crisis, it will then embark on campaign to create wage inflation to save the average joe and then we will see our next bubble form to get us out of this mess. We just need to hope they restructure our financial and economic system during this time or we are screwed. I mean its either we pay the piper now or later. So yeah oil is high (again because of inflation) and even when inflation subsides it will still be higher than we are used to. This is the price we pay for having a irresponsible govt, and fiat monetary system and a absurd F.I.R.E. economy, well mix in irresponsible consumers to boot.
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05-12-2008, 10:28 PM
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20,185 posts, read 22,877,306 times
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Its called "The Iraq War"... you will NEVER see low gas prices again because of Bush's and Congress's miscalculations on the Iraq war... they thought it would lower oil prices... it didn't... the rising prices is due to fluctuations in the market and devaluation of the dollar but even without them, oil prices will still be high because of the Iraq war...
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05-12-2008, 11:27 PM
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Location: Wouldn't you like to know?
9,116 posts, read 17,059,100 times
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If I knew how oil prices would fluctuate, believe me I wouldn't be wasting my time posting on C/D....
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05-13-2008, 04:04 AM
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Location: Los Angeles Area
3,306 posts, read 3,913,725 times
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Quote:
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The dollar is weak because the govt is printing money in order to pay debts.
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There is much more to the picture then this. In fact the FED hasn't "printed money in order to pay debts", they have been swapping one asset for another. This doesn't increase the monetary base despite popular opinion that suggests it does.
Anyhow, oil is not going to get cheap until the major economies stop using it as their primary source of energy. OPEC may try to get the price down to stop development of alternative energies (ahem...like the past), but this assumes they can actually increase production this time. |
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05-13-2008, 06:46 AM
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Location: America
6,993 posts, read 16,740,993 times
Reputation: 2092
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Quote:
Originally Posted by Humanoid
There is much more to the picture then this. In fact the FED hasn't "printed money in order to pay debts", they have been swapping one asset for another. This doesn't increase the monetary base despite popular opinion that suggests it does.
Anyhow, oil is not going to get cheap until the major economies stop using it as their primary source of energy. OPEC may try to get the price down to stop development of alternative energies (ahem...like the past), but this assumes they can actually increase production this time.
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your right, the FED hasn't printed money. The U.S. treasury does 
As for whats going on right now, I will just say as I always do. Do research if you are interested, or not. |
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05-13-2008, 07:03 AM
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532 posts, read 1,191,654 times
Reputation: 139
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Problem with bubbles is that they usually last longer than expected. You really could have said there was a housing bubble in 02, 03, 04 ,05, 06 and it eventually started to pop in 07 ish. Tech bubble went on longer than expected too.
There are always rationalizations for the bubbles:
Tech--this is the new economy
Housing--houses only go up in value
I think the energy bubble will pop eventually, but it's hard to predict something that is irrational in the first place.
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