Where It All Started

[WVRICK13]

Correct me if I am wrong but I think the entire economic situation can be explained by massive profiteering by the oil companies. The price of fuel raised to the point that people bought fuel to drive their cars and heat their homes and had nothing left to purchase anything but necessities. Unfortunately some of the necessities had to be put on revolving credit. The oil companies, during this time, showed profits like no other industry in the history of humanity, yet, we were told it wasn't their fault. With the majority of all cash expenditures going to the oil companies, all other industries took a hit. This downturn lead to layoffs and the spiral began.

Can anyone tell me why there aren't criminal investigations into this series of events, other than the fact that asshole in the White House gave his oil buddies a parting gift? Our response is to rescue his other buddies on Wall Street, am I missing something? The rich are getting richer. People with money can purchase homes, land and business real estate for a fraction of its' value and wait for a rebound. This successfully transfers more wealth into the hands of the wealthy and obliterates the middle class. I think this is a bit too convenient.

[nebenaube]

1. ding ding...

Welcome to DU...

[lostnotforgotten]

2. A Few Facts

1) The Oil Companies Own and Control only about 15% of the world oil supply. The rest is owned and controlled by state entities like Saudi Arabia, Venezuela, etc.

2) The run-up in world oil prices was due to to simple economics: supply and demand. If demand is high and supply is constrained, prices rise.

3) Oil prices have fallen because of supply and demand. Demand destruction has occurred globally which has resulted in excess supply.

4) Once the current global recession abates, demand will rise again which will cause price to spike again all due to constrained supply i.e. Peak Oil.

5) The oil companies have made record profits because they were able to sell oil into a global market at high prices while their costs for oil extraction and delivery were relatively constant. Market Price - Fixed Cost = Profit.

6) If Americans want to become immune to the fluctuations in Oil prices, then Americans will need to rescale their demand for fossil fuels accordingly.

[HamdenRice]

3. I agree entirely with the first part

The root cause of the problem was a rise in prices in oil prices and the resulting inflation in everything households buy, but unlike other inflations there was no rise in wages. People were squeezed and defaulted on debt. Period. End of story.