Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
You have to remember that it is now silly season in the US. One third of senators, all the representatives and the presidency are up for election. Saying things to appeal to voters is the theme of the day. It doesn't make any difference if they statements make sense economically or even follow the laws of physics as long as they might attract a few more votes.

The heads of the big oil companies that testified yesterday before congress weren't much better. They suggested expanding US exploration, even though they know full well that any finds won't do much to solve shortages.

In addition we are in the middle of a panic. Oil prices are overshooting on the upside and we can expect bad polices to be enacted as a result. If one really wants to understand what is happening then, as usual, follow the money.

I'm not knowledgeable enough to do this, but one has to ask who benefits most from high prices. Speculation is an easy target, but makes little sense. Oil is not gold, you can't hoard enough to make a killing when the price rises. Oil producing states, however, don't have to hoard they just have to get higher revenue when they sell at the higher rates.

I would look at the behavior of the major oil states, especially those who control their oil operations directly and see what sorts of actions they have been taking of late. Have they been taking their windfall revenues and investing them elsewhere, or are they squandering them on expensive civic eye candy as Qatar is doing?

In the past when US "vital interests" were threatened we used gun boat diplomacy to force trading partners to behave as we wished, just because it didn't work out well in Iraq, doesn't mean it won't be tried elsewhere. If I had to guess I would suspect a rise in political instability in South America aimed at toppling the leftist governments that are too independent for America's liking. The CIA is very good at destabilizing governments.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Thu May 22nd, 2008 at 10:00:15 AM EST

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