$65 oil is coming (credit card, debt, mortgage, sell)
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The inflationary policies of the 2000s have been extreme.
You mean inflationary policies of the 1990s and 2000s.
If you had a clue you'd know that the rate of Currency Inflation remained unchanged from January 1992 until just about 4 or 5 months ago at 2.9% which is half the rate of the UK over the same period (yet the Pound Sterling has always been greater in value than the US4$).
Prices have been rising steadily due to shortages in commodities and natural price increases. They don't call them "developing nations" for nothing, and there's nothing the Federal Reserve or government can do about Cost Inflation, except price controls (and that only causes shortages and black markets).
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Originally Posted by bale002
Furthermore, the US has never faced such a wide array of competitive forces globally.
In relative terms at least, the US has lost competitiveness and, on the current path, it could become permanent.
At least you got that part right.
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Originally Posted by bale002
Nonetheless I agree that, with the right set of policies, the US can overcome the present situation, and probably better than most places.
Which policies would that be? A draft to return to the Reagan military, or an artificially induced recession to coerce permanent job losses and a permanent downsizing of the economy?
Earlier this summer when Oil was $142 a barrel, so many so called experts said that the rise in price was strictly supply and demand and that $200 a barrel oil will occur soon. If in fact oil goes below $100 a barrel this fall, I can say with some confidence that the oil market was minupulated and it was strictly speculation not supply and demand. Agree?
Demand has not dropped 25% in the last few weeks nor has our American Dollar gone up all that much.
Last edited by Oregon Transplant; 08-15-2008 at 11:34 AM..
Earlier this summer when Oil was $142 a barrel, so many so called experts said that the rise in price was strictly supply and demand and that $200 a barrel oil will occur soon. If in fact oil goes below $100 a barrel this fall, I can say with some confidence that the oil market was minupulated and it was strictly speculation not supply and demand. Agree?
No. There is some speculation built into the price of oil, but that's not all of it or even most of it. There are people who invest in oil and trade it like other investments. These people are not end users. They see weakness in the U.S. dollar and other U.S. investments and use oil as a hedge. Also, with a weaker U.S. dollar, oil is cheaper for foreign countries, as oil is traded in U.S. dollars. A lot of the price increase has been the result of an unprecedentedly low U.S. dollar. The dollar is finally starting to strengthen again, which is a major reason why prices are coming down.
It looks like it's pretty close to a bottom. $110 would bring it near the bottom of its long-term trend. $100 would be approximately half-way from the top to the bottom.
No my friend. He is going to engage in a money printing effort the likes of which you have never seen before.
Even if the government (or FED) wanted to increase the money supply dramatically the markets wouldn't allow it. That is to say any benefit from the increased inflation would be eliminated due to the markets reaction to such inflation.
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A lot of the price increase has been the result of an unprecedentedly low U.S. dollar.
Most of the price increase can't be attributed to the drop in the dollar nor can the current decline in oil be largely attributed the increase in the dollar. Why would a decline in the dollar of around 15% against some currencies cause oil to double in price?
I think oil will trade between 80-110 for the forseeable future. A lot of economies depend on the price of oil and many will be happy if it stays in that range. If it drops back into the 20s like in the 1990s, the consumer would be happy but many would also be out of work.
Sssssst....whenthe were saying $ 150-$200.- it started to go down so be careful by saying a number.....it might go up just because you wake some one up....lol
No. Won't happen. OPEC would not allow that to occur. It might go down to $80 which is about the least OPEC wants to see.
I don't think it will go to $65 either. $80 would be a good price all around. It would reflect the marginal cost of production now, would probably accurately reflect demand for the foreseeable future. Would be inexpensive enough not to cripple economies but expensive enough to make investment in alternative energy attractive.
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Was it really supply and demand or speculation?
