|
ace--there's a combination of factors that are probably to blame for the price spikes of late---as usual, the econ 101 level supply-demand relationship is not adequate to think about much. it's therapeutically interesting, however, in that it reduces complexity.
on the other hand, it is difficult from the viewpoint of someone outside the games themselves to get adequate information--so finding a particular set of trends or actors to pin the spikes on is problematic. there is a supply issue. there have been shifts over the past 6 months in the way futures speculation has been carried out--if you believe george soros, one of these is the arrival of large-scale index speculators, which buy up huge amounts of futures and sit on them for predetermined periods---the argument as i understand it is that this tactic removes the futures from play in the shorter run---the effects has to be a function of the volume that is being taken out of play. but that's hard to say. in the oil/food thread, i've been assembling information about this from time to time and there's a debate about the relative importance of these actions--and i confess that i am agnostic about it simply because i don't feel that i can get close enough to real-time information and so can't see for myself what is going on.
i don't see the demand argument which pins all this on china and india as being coherent--i haven't see any data that backs it up (sudden rises in car sales in these places for example).
generally, though, i think the price spike is a function of
(a) the devaluation of the dollar
(b) irrational energy policies in general, particularly in the united states
(c) supply-level politics on the part of opec
(d) the war in iraq
i don't have time at the moment to explain d really--it ties to a in that i see it as a political factor that in part explains the devaluation of the dollar--note that i write "in part"
the domestic drilling issue seems to me a curious factor in all of this: basically it appeals to a sense of nationalism, a fantasy of control. i am not convinced that opening up drilling in the us will solve much of anything--the problem is more irrational energy policies in general--if the states can do something--and it won't happen with republicans in control--it is to re-examine the american transportation model and maybe take a significant percentage of the monies presently wasted on the national security apparatus and the idiotic "war on terror" and redirect it into infrastructure development (expanding public transportation) and encouraging alternative transportation technologies that benefit people who are not part of the ownership complex behind monsanto, for example.
gotta go.
__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear
it make you sick.
-kamau brathwaite
|