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Why $140-a-Barrel Oil is No Surprise
salon.com — A reader observed in an e-mail this morning that for him, and a lot of the people he has talked to recently, the sharp rise in the price of oil and gas over the past year seemed to have come out of nowhere, out of the blue. Why now, he wondered? What triggered this sudden upsetting of the apple cart?
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- staxofmax, on 06/27/2008, -1/+1The article does layout a clear case for why oil prices are what they are. If one looks at oil as a primary catalyst for economic growth, then the runup in prices can be seen as a likely indication that there is simply not enough growth in oil supplies to sustain the current rate of global economic growth. Current and future economic growth will have to be sustained by both improvements in energy efficiency and the growth of renewable energy.
- Rewebbed, on 06/27/2008, -0/+0The solution isn't how much ethanol we can produce. The shortage of oil will cause us to look at more efficient and less dependable sources of energy to power our vehicles, homes, and offices. It's our human nature to become innovative in times of shortages or restrictions. look at the aquaducts in rome. or egypts plentiful crops. if its not available to us in a comfortable way, we will find a way around it. (props to man)
- Rewebbed, on 06/27/2008, -2/+0Ughh.. hu hu. he said corn.
- rzxc, on 06/27/2008, -0/+3The people who argue that speculation has not caused a dramatic rise in oil prices are probably the same people who are driving up the price of oil. Ironically, the reason the author gave for the rise in oil prices (the perception that the demand for oil will increase while the supply will not) is the argument driving the speculation. The author failed to mention that only a few months ago, Brazil discovered it had a mind boggling 33 billion barrels of oil. So much for the end of oil discovery. So what's going on here? It's simple. The only thing Wall Street knows how to do is make bubbles. They created a stock market bubble, then they created a housing bubble, now they're creating a commodities bubble. They need to create this new bubble to bail themselves out of the last bubble. Only this time it will not work. The commodities bubble has hurt consumers and caused them to demand higher wages. This will create a runaway inflation spiral if left unchecked. The central banks know this. They will soon raise interest rates and they will continue to raise interest rates until the price of commodities goes down to a more reasonable level. The speculators will be crushed. Don't say I didn't warn you.
- vsujohn2, on 06/27/2008, -0/+1Who was surprised to warrant this article?
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