Déjà vu, it's 2008 all over again. Why are gas prices soaring through the roof?
Some are revisiting oil speculation as the culprit. Commodity futures speculation always pops up in the public discourse the minute gas prices go above $3.65, yet nothing ever seems to come of it.
Our usual stupid political tricks, from tapping the strategic oil reserve to the GOP blaming Obama for gas prices, are in full swing. Isn't this all getting rather old? Wouldn't we all just like a stable price fluctuation in a key critical commodity upon which our economy and our empty pockets depend?
We know one thing, $5 gas can literally kill economic recovery. Oil shocks are correlated to recessions, as James Hamilton points out as do others. Below is a quarterly historical graph of real GDP percent change vs. the West Texas Intermediate average Oil Price. Notice the spikes in oil price and the grey recession bars.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
Tonight's theme are two plots by business interests to overthrow Democratically elected officials simply because they didn't like what the nation would do.
I was invited by Manfrommiddletown to stray from my usual Blog home at European Tribune and post on the subject of Credit Default Swaps.
I find it hard to post on CDS without reference to the wider context, and in fact the reference here yesterday to the proposed Gas OPEC gives me the perfect excuse, since I have in recent days had a direct and intimate exposure to that initiative.
I have just returned to Scotland from ten days in Teheran, and was asked - by the head of the Iranian Majlis (Parliament) Energy Commission among others, to propose my ideas as to a possible structure for such a global gas market initiative.
For those who don't know, I was once upon a time a Director of the International Petroleum Exchange (now ICE Futures Europe), and since then have been busy in the area where markets and the Internet converge.
Today's UK Guardian has an article about how Russia, Iran, and Qatar are forming a natural gas cartel rivaling what OPEC has done for oil.
The move by the three countries, which control 60% of the world's gas reserves, was met with immediate opposition from the European commission, which fears the group could drive up prices.
Alexey Miller, chairman of Russia's Gazprom, said they were forming a "big gas troika" and warned that the era of cheap hydrocarbons had come to an end.
"We are united by the world's largest gas reserves, common strategic interests and, which is of great importance, high cooperation potential in tripartite projects," he explained. "We have agreed to hold regular - three to four times a year - meetings of the gas G3 to discuss the crucial issues of mutual interest."
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
Recent comments