Wednesday, October 15, 2008

Drill baby, drill. Looks like we don't need to.

Back in mid-July, the cost of crude oil reached $147/barrel. At the time, OPEC blamed a weakening supply as the reason for the record cost. We knew better though. It was all speculation, right? George Soros said it back in May: He said those exact words actually. He said that the price of crude oil is based more on speculation than any rational balance of supply and demand and that a recession in the US and the rest of the West would bring oil prices down sharply. Look what we're seeing now. He couldn't have been any more right. I'm no expert in commodities trading, but do you think a greater supply could have caused a $75 drop in 3 months? I doubt it.

I don't support a cap on speculation, but it's pretty clear to me that financial investors were ripping us off all summer.

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