farmer448

Goldman's Wonky Oil Predictions: What Gives?

Bubbles bubbles and more bubbles. If an analyst was true, they would have looked at the oil bubble in the early 70's and concluded their was no way oil would go to 200.

The theory then was oil pricing was inelastic. Then low and behold, inelastic became sticky and the price of oil dived. Japanese cars became mainstream in the US market due to mileage.

Same thing when the Southeast Asian crisis hit and demand fell.

Conclusion: Goldman analysts were pumping oil and probably making a tom of money off it.

Speculating on Oil Regulation - Not the Most Effective Tool

So lets eliminate the Enron Rule, Up margin by 10% a month and see what happens to Energy Prices.

Corning markets happen. Enron in California Energy markets and the Hunt Brothers in Silver. Cut out the Monopoly and prices dive and stay down.

Who's Really to Blame for Rising Oil?

Accessing blame never solved a problem. So here are some suggestions:

How about increasing margins on oil/gas futures contracts?
How about increasing Federal and State Fuel taxes to fund Transportation Infrastructure Upgrades? (kinda like the Interstate System)

Improving the rail sytem n moving goods long distances around the country? (Rail is overly regulated and needs a good review top to bottom on what is necessary and what works).

Improving manufacturing in the United States to cut supply time. (American Apparel is a good example)