Posted by
m0t0r1zed on Thursday, June 26, 2008 1:16:49 PM
Death by incrementalism. Psychology will keep moving the prices back up, regardless of all of the real changes that have occurred - increased production from the Saudis, a sustained drop in US demand, lifting of gas subsidies in growing economies, changes in regulation on oil speculation, stabilization of the dollar, shifts in auto production and purchases, etc.
Doesn't matter. All of it has been too incremental, so psychologically, the speculators can mentally absorb the shock and find some rationale to justify jacking prices back up. However, they do seem to be afraid of the $140 mark (so far) but also seem to believe that they can psychologically sustain prices above $130.
LOL, some estimate that this is around $40 higher than real supply and demand (that's why it's a bubble, duh). Since everybody has pulled a Pontius Pilate and washed their hands of the matter, it looks like the only thing that will knock oil down is a recession.
Great job! Terrific leadership! You know, the usefulness of the guillotine might be underrated.
It's pretty simple. Eventually, the drag on world economies from oil prices and inflation will pull other countries down into recessions and eventually, the US along with it. Nothing complicated - even an idiot like myself can see this is happening right now (it's a shame since our economy did such a brave job in fighting past the credit and housing fiascos despite rising gas costs and constant media drumbeats of doom). Anyhoo, mild to severe stagflation will kick in, oil demand will drop, the oil bubble will pop, and then everyone will cross their fingers and hope that the world economy will recover sooner, rather than later.
http://biz.yahoo.com/ap/080626/economy.html?.v=14
I was one of the few people that didn't buy into the doom and gloom nonsense when it was the hip and trendy craze, and I believed that the economy could avoid a recession. I was right, but now oil has gone beyond ridiculous.
The situation is really, really simple. Oil speculators won't back off of current prices until we get a recession.
Why? The psychology of incrementalism. Look at the list of things that have changed ... and oil prices still won't move anywhere but up. Even a surprise rate hike yesterday might have gotten the ball rolling a little with the dollar and all that, but oil probably would have eventually crept back up anyway. *sigh*
But it's just a guess. I could be wrong. Anyhoo, I'm not gonna bother with oil anymore since nobody will implement the necessary measures for both short-term and long-term solutions.
This has been about as much fun as watching a bunch of idiots drive your car over a cliff at 5 mph from 1 mile out. You're jogging alongside of them, telling them what to do, but they're all like, oh noes!!! ima gonna crash!!! i hope the recessionary fall isn't too steep or protracted!!! and have their eyes covered with both hands. Like I said, the guillotine is highly underrated. :P
(and I now understand why beheadings were such festive occasions)
P.S. oh yeah, about the SCOTUS gun rights thing. Well duh, I'm surprised it was even that close. However, it looks like strict constructionists barely eked out a win. I wonder if the Constitution's days are numbered. A day may come when it will just be a quaint document that looks pretty in a glass case - and nothing more. Oh well, we're all gonna turn into cybernetic energy beings in the far future anyway, so I guess it doesn't matter. -_-