It is easy to blame big oil for the sharp rise in prices at the pump,
but they are not necessarily to blame. Everyone has probably heard of
"Futures Markets". People speculate on what any given commodity might
be worth in the future and bid on it. With oil running around $108
bbl. it stands to reason that someone had to bid on it, at that
price. If there are no speculators to bid at those prices, it drops
in value. The same thing is happening to home prices, as buyers are
hoping prices drop more, before jumping in.
If you don't like the high prices of other things, those are most
likely also being run up by the 'futures market'.
While all of this 'fragile speculation' of commodities is running
rampant, it is just the latest up and coming debacle.
Not long ago we had the cor****ate book-cooking fiasco, that resulted
in Sarbanes-Oxley, having affected Tyco, Global Crossing, Enron and a
host of others.
After that came the housing crisis, brought about by shady lenders and
appraisers, hoping they could sell their 'inflated paper risk' to
someone else. This worked for a while and became global.
Now banks are afraid to lend, because they can't find a buyer for the
risk. Hence the 'credit crisis'.
Shady operators just jump from one thing to another thing, that is big
at the time.
That is until they get rounded up and "Do Time", while someone else
fills their shoes, inventing the next great debacle.
If enough people reduce their consumption of any given item, the
prices drop until the market resumes buying.
This goes for gasoline, food, houses AND Studebakers.
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