Why Oil Prices Are So High

[babylonsister]

Why Oil Prices Are So High

By Sam Pizzigati, Too Much: A Commentary on Excess and Inequality. Posted June 10, 2008.

Looking for villains around the gas pump? Look at the super-rich making bets with billions while regular people always lose.


In the late 1990s, we had the stock market bubble. That popped. Then we had the housing market bubble. And that popped. Last week the market for crude oil bubbled to an all-time high, nearly $140 per barrel. We seem today to be forever blowing bubbles. Maybe we should stop and ask why.

After all, back in the middle of the 20th century, our economy didn’t careen from one bubble to another. Why now all the bubbles — and busts? Here’s why. We’ve become too unequal. We have too much wealth concentrated in too few pockets.

Grand concentrations of private wealth, history tells us, have a nasty little habit of nurturing wasteful and witless speculation. Wasteful and witless speculation, news reports last week revealed, just happens to be the economic joker in the deck that's turbocharging our current surge in crude oil prices.

The speculation now doing so much damage at America’s gas pumps comes mostly out of hedge funds, those shadowy mutual funds on steroids open only to the deepest of deep-pocket investors. This special status largely frees hedge funds from any federal financial oversight and regulation.

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http://www.alternet.org/workplace/87474/

[liberal N proud]

1. Speculation

All these bubbles are caused by a few who are speculating. When they have milked all they can, they move on and then the next bubble begins. They manage to make billions before anyone learns about the new bubble forming.

[fasttense]

2. Just another ENRON style price rigging bubble. n/t