How To Fix The Economy

[bourbon]

In November oil was $77 and now it is 95. How can that be? A 20% increase. Has oil demand risen by 20 percent?

The very question already shows that you have no clue about economic theory. The correct question would have asked for the price elasticity of demand for oil. That's 1st or 2nd semester microeconomics.

Gentlemen,

Market fundamentals are less and issue than index speculation, which has driven a premium of 15% by conservative estimates, to as high as 50%. NYMEX recorded record net long positions in crude futures and options. Its paper, just like it was in 2008.

There have been several posts and links in other threads about record commodity prices from excessive speculation.

Note: I should add that chapter four in Matt Taibbi’s book Griftopia explains the 2008 commodities bubble in the simplest terms possible. Taibbi does a superb job of explaining complex financial, political, and economic issues to the lay-reader, with remarkably less vulgarity. This book should be required reading for every American.

[slapout9]

Link to Real News Network interview of Yves Smith from nakedcapitalism.com on the true story of President Reagans economic policies.



http://www.youtube.com/watch?v=0FAZG...&feature=feedu