Originally Posted by traytodd
The recent run up of crude price from $120 to near $140 is purely speculation...When the price is high enough, then the bubble will burst leaving the suckers with the losses. Its the .com, telecom, housing scenerio all over again. \
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Unfortunately, the run-up will not reverse until we do something about the sinking U.S. dollar, which is also fueling the speculative market. All these bubbles are initially caused by the lending of easy credit. The Fed prints excess money to fund government expansion, then people believe that the good times are rolling, and borrowing expands exponentially. Then there is the inevitable market correction as business catches on that the lending money supply has been inflated (depreciated). The speculation in oil and commodities is due to investors abandoning worthless paper. The dollar was once backed by gold, but it is now unofficially denominated through credit backed by oil. So unfortunately, there's going to be a problem solving the current "bubble".
"It is to be supposed that this year’s meeting will include discussion of current international emergencies, such as Afghanistan, the high cost of oil, and the world economic crisis. Concerning oil: after the Ottawa meeting, indiscreet leaks reported that a decision had been announced by oil producers to raise the cost of oil to over $100 a barrel over the course of two years."