There were several factors coming together from around the world to push the price of oil to almost $150 a barrel just a few short weeks ago. But, even though I know that a single factor can not explain an event that has so many players involved, as the price of the commodity oil has, my Jewish-Russian ancestral paranoia nevertheless crepes into my thoughts about the movement of the price of oil and in turn the price of gasoline and diesel over the last several months.
Now that I have gotten that out on the table, I can feel better about where I am about to go with this. Gas and diesel over many years have been the best examples of inelastic demand when talking about inelastic demand in the classroom. At one time cigarettes were also used as an example of an almost inelastic demand, but that was before the Federal Government decided that cigarettes were bad for your health. Oil, on the other hand, is not only good for your health, but I can not begin to list all the things that we eat, wear and live with that have something to do with oil. If we were going to pray to a commodity, I think it would have to be oil. And yet, this indispensable commodity that we Americans depend on for so much of our life style and quality of life, do not forget the role oil plays in health care, that our leaders would drop the ball regarding its importance to our way of life is hard to believe. This is were my paranoia crepes in.
Was it really the coming together of several economic events including the fall in the value of the U.S. dollar that drove up the price of oil and in turn the price of gas, or was it simply political pay back time for the present administration? You have to have real paranoia credentials to put this one on the oil industry, but after this administration’s track record, I think it is entirely possible. Especially when you have former chairman and CEO Cheney running the administration. It will make for interesting reading some day after a few historians start digging into the documents about the present administration and the oil companies. Unfortunately, many of these documents will be sealed because of national security reasons, but eventually the truth will come out.
In the mean time, the price of oil and gas are coming back down. Could this have anything to do with the presidential elections and the Republican Party? At this point, I don’t care, I am just happy the price is coming down. Go Obama.
Stay tuned.
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4 comments:
Again, you and I agree. It will be VERY interesting when the 'truth', whatever it is, finally does come out.
It is my opinion that you and I will probably not live to see the papers opened to the public for review. They, this administration, was much worse than Nixon's administration. What will be interesting, will be how hard the journalists push to uncover what really went down.
Hi there! Just wondering how you discover my blog. Anyway thanks for sharing & hope that we can exchange idea on some issues!
Welcome Lawrence. From time to time I look at blogs that have listed an interest in economics, politics or art. All you have to do is click on the word "economics" on YOUR profile page and it will take you to all those people that have listed "economics" as an interest on their profile. You can repeat this with any interest you list on YOUR profile. Take a look at some of my earlier postings, you may find them of interest.
Again, thanks for dropping by and checking me out.
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