Monday, June 16, 2008
The Oil Bubble
"In there an oil bubble that is about to burst? ... At issue are deep disagreements over what is driving the run-up in oil prices. In the search for scapegoats, many on Capitol Hill in the U.S. and elsewhere are now blaming oil-futures speculators, noting the vast cash inflows into commodity index funds. ... Hedge-fund manager George Soros also has chimed in. 'We are currently experiencing the bursting of a housing bubble and, at the same time, a rise in oil and other commodities whch has some of the earmarks of a bubble,' he said Tuesday in prepared testimony before the U.S. Senate. ...Economists who have cited the dollar's fall as a key factor in the rising price of oil now argue that the linkage is set to reverse. ... The main factor cited for sustained high prices is the surprisingly steep fall so far this year in production from some of the world's key exporters, paticularly Mexico, Russia and Venezuela", WSJ, 4 June 2008.
Congress's search for scapegoats continues. Who cares what Soros says? I don't. See my 13 June 2008 post.