Oil Bubble

One of the reasons that the electric car (and basically all alternative energy) is doomed to failure (see previous entry), in the world as it presently exists, is that the oil price "bubble" has burst.

This is as predicted in this blog, although I was somewhat early in the prediction (as momentum, computer trading and China demand combined to keep the price higher than I thought for longer than I thought). I became especially emphatic in this prediction when oil spiked to $140.00 a barrel, and there I was absolutely right (the Wall Street traders again showing that they are the stupidest people on Earth--driving the oil to a price above $140.00 a barrel just as the price bubble was poised to burst).

Since then, oil has dropped much more than housing. It has dropped more than the stock market. It closed today at about $44.00 per barrel--a drop of two thirds. A lot of people have lost a lot of money in oil and oil related commodities and stocks. However, there does not seem to be a big push to bail those people out.

My brother (the trucking company co-owner) sent me a gloating email today about today's close in the price of oil, with "expert" commentary that there seems to be no bottom. These are the same Wall Street "experts" who were saying that there was no top in the price of oil, as it went to $140.00 a barrel. There will, of course, be a bottom, even as the momentum traders make it seem like zero is not a bottom.

But where will that bottom be? Will it be at $40.00? $30.00? $20,00? $10.00? Don't laugh. Oil was as low as $10-$20 dollars as recently as the Clinton years, and in the $30.00 range through much of Bush's first term. Some of the decline in the stock market has actually been related to this collapse in commodity prices (admittedly largely a result of the economic "crisis", but inevitable at some point).

"Bubbles" burst. I predicted (foresight again) that the housing "bubble" would burst. The oil "bubble" has burst. Our problem is that we no longer seem able to take these things in stride--with financial "markets" that are overreacting to every development in 1929 style, along with producing financial instruments (computers again) that have magnified both "bubbles" and the consequences of them bursting.

That is why I have said that the fact taht our financial markets are broken, and no one is fixing them with anything besides government money (which does nothing to fix the fundamental problems), makes our economy hostage to the stupid 1929 type maniacs now controlling Wall Street and financial trading in the stock market and all other markets.