Bernanke put the oil speculation nonsense to rest today

[piezoe]

Quote from MarketMasher:

Everybody who believes in Bernanke can all join hands and be "Bernanke Buddies"!!

In a way, Olias is right, because Bernanke is just the current face on a system. That's the way it is with most "leaders", unless you are an entrepreneur that sets up a system (just like starting a company). Most guys in charge are just baby-sitters of an pre-built system. And it seems the current system is set up to screw up (history suggests that anyway) - he just happens to be Grand Marshal of today's parade.

That's likely very close to the truth.

 

[piezoe]

Quote from Tsing Tao:

no one here is discussing or arguing the bailout of the banks, AIG or the financial crisis. what we are discussing and placing blame on is quantitative easing and the continual theft of the savers of this country to perpetuate a continual onslaught on the value of the dollar, in the hopes of inflating away our debt. in the process, inflation - or shall i say STAGflation - through skyrocketing commodities and stagnant/falling wages.

if you honestly try to argue that there is no inflation (and you have, olias) then you are completely deluded.

piezoe, you also think there is no inflation, do you?

Tao, you are right, inflation ravages savings. Overall the USA is a debtor nation however. And on balance inflation is very useful to debtors assuming their incomes increase at least as fast as the inflation rate but interest on debt is at fixed rates. Personally, I dislike inflation, because I have virtually no debt and lots of cash. Keeps me humping to figure out how to put it to work to stay even with inflation, let alone make a real profit.

 

[shiko2000]

Quote from the1:

This is complete bullshit. Oil is rising because the dollar is falling. The dollar is the reserve currency so when it falls significantly commodities will rise. There is a very strong correlation between the dollar and the price of Oil. Bernanke is blowing hot air up the public's asses. Stop the printing presses and the devaluation of the dollar and Oil, along with Silver and Gold, will come down quite quickly.

It is one of the reasons but there are fundamental reasons of oil price rise.
China/ India rise, the lack of big new finds for few decades and exhaustion of existing reserves. Peak oil in short.. By big finds I mean super fields.

 

[piezoe]

Quote from denner:

There is one common theme amongst all of the opinions. Namely, the fact that the repeal of Glass Steagall was a bad idea. We can all agree on that.

It's also well known that at approximately the same time (perhaps 2 years after the 1999 repeal of Glass Steagall), Rubin, Summers and Greenspan all fought against the CFTC regulation of derivatives.

Now, put 2+2 together. Glass Steagall was repealed and within no time banks were leveraging up via derivatives, creating the immense shadow banking system which collapsed and precipitated all of the b.s. that we've had to endure the past few years.

I go back to the analogy about the firefighter and the arsonist. The same institution which set the fire has been heralded for its "valiant efforts" in fighting this fire. It seems that Greenspan has been scapegoated and now Bernanke is given a free pass. I'm certain the entire episode was designed to place blame upon one party so as to give leeway for the successor to "do what's necessary".

Many people have fallen for this trick, that much I'm sure of after reading thread after thread arguing in favor of Bernanke's actions.

I don't think Greenspan is (was) a "scapegoat". I think, he, more than any other single person, was responsible for the mess. There is a large cast of characters vying for the honorable mention however.

 

[MarketMasher]

Quote from shiko2000:

It is one of the reasons but there are fundamental reasons of oil price rise.
China/ India rise, the lack of big new finds for few decades and exhaustion of existing reserves. Peak oil in short.. By big finds I mean super fields.

I think somebody overlaid a chart of the dollar and oil.

Could still be a coincidence though....

 

[denner]

Quote from piezoe:

I don't think Greenspan is (was) a "scapegoat". I think, he, more than any other single person, was responsible for the mess. There is a large cast of characters vying for the honorable mention however.

I didn't phrase it accurately. I believe he is as culpable as anyone, although I'd throw as much of the blame on Rubin and Summers as well. There was a systematic dismantling of all the safeguards from The Great Depression during that late 90's early 00's that set the stage for this.

 

[John_Doe]

it'll be interesting to see how decision makers deal with emerging markets' increasing oil consumption as it increases inflation, slows down recovery, can't get american workers to work, and robert gates said awhile ago land war in asia is out of the question

 

[piezoe]

Quote from denner:

I didn't phrase it accurately. I believe he is as culpable as anyone, although I'd throw as much of the blame on Rubin and Summers as well. There was a systematic dismantling of all the safeguards from The Great Depression during that late 90's early 00's that set the stage for this.

Yes. I agree.

 

[piezoe]

Quote from MarketMasher:

I think somebody overlaid a chart of the dollar and oil.

Could still be a coincidence though....

A simple calculation will tell you what fraction of the rise in oil price is attributable to dollar deflation.

 

[good ole boy]

Quote from the1:

This is complete bullshit. Oil is rising because the dollar is falling. The dollar is the reserve currency so when it falls significantly commodities will rise. There is a very strong correlation between the dollar and the price of Oil. Bernanke is blowing hot air up the public's asses. Stop the printing presses and the devaluation of the dollar and Oil, along with Silver and Gold, will come down quite quickly.

The data don't bear out this conclusion, unless you see a roughly 4-to-1 relationship between the dollar and crude when the dollar falls and crude rises. The US dollar index hit a two year high (about 89 - indexed against the euro, yen, GPB, SF) about this time last year and at that time crude traded down to almost 67. The dollar index has since fallen roughly 20% (it is now about 73) yet crude has risen nearly 80%. Had there been a strict 1 to 1 correlation, crude would have risen just 25% and would be trading in the low 80s instead of 112. So clearly, other factors beyond the value of the dollar are predominant in the changing price of crude over the last year.