NationStates Jolt Archive

By this I mean financially through the increase in oil price.

I'll keep this brief:

Bush cut taxes. Bush starts war. Need taxes to fund war and rebuilding of Iraq but we have no funds to support it.

Therefore US is mounting up crazy debt.

Foreign countries (China, Saudi Arabia and Japan mostly) buy our debt so we can purchase more of what they are selling. (It's a vicous cycle that will inevitably pooch our economy, but anyway...)

Saudi Arabia, one of the major debt-buyers sells oil (duh).

Republicans keep neutering recent laws calling for reduction of oil use and encourages the sale of gas guzzlers through tax rebates and whatever.

Therefore, we buy lots of oil.

The Saudi's use the money to buy more and more debt. Taking off the US's financial burden.

Worldwide, the price is up. Everyone pays up.

QUESTION:

Is it simply greed that the oil is up?

It isn't the 'refinery' excuse. If we couldn't make enough gas to keep up with the supply of crude, the price of gas would be up but not the price of crude, which would fall since there is too much of it around. Both crude and refined oil are going up mysteriously.

My hypothesis is that crude is going up because Bush got the Saudis to raise the price and use that money to buy the debt he has accumiliated in the restructuring of and continuing war in Iraq.

Therefore, everyone in the world is now paying to rebuild Iraq through a de facto backdoor tax. A mighty large one, too.

Comments?

We pay for the war through our taxes, but look at who benefits from the return! Exxon, Mobile, Texaco, BP, Halliburton.....
So rich corporations get richer, while America has lost 1,800 of it's most valuable, irreplacable resource-her young people.
And still, people drive around in Suburbans and H2's with yellow ribbons on them. Oh, the irony! Gas money goes to oil company, who buys it from a Suadi, who gives it to a terrorist group, who give us a 7.62x39 return on our investment. Blows my mind. But hey, I get to go to the 'box again in November!

There's also the issue of increasing global demand, espescially in China, as well as some supply issues that account for the current situation of oil prices as well. I'd say that the effect of the war is far less than the effect of that other factors are having.

The primary reason oil prices have risen is because the dollar has weakened. Commodities are priced in dollars, and when they weaken, the price goes up. Recently, the countries who have the most to gain from high oil prices have intentionally weakened the dollar by replacing it with Euros, thereby manipulating the dollar in to a weaker position regardless of the fundamentals behind it. This in turn increases their profits, and they manipulate the currency market again to increase them further.

There are no fundamentals supporting the decline of the dollar against the Euro.

If Bush stops his Big Government spending spree, then we will be able to considerably reduce the budget deficit, and maybe even turn it to a surplus. This deficit is due to spending, rather than tax cuts.

There's also the issue of increasing global demand, espescially in China, as well as some supply issues that account for the current situation of oil prices as well. I'd say that the effect of the war is far less than the effect of that other factors are having.

But global supply is keeping up with demand, and refining capacity is now growing faster than anticipated. The current price of oil is being bidded up by speculators, and the recent price moves suggest fundamentals are starting to burst the oil bubble.

Oil at $40-50 is a reasonable range given the terror premium and Chinese demand. Any higer is speculation.