I'm not an economist (which should be abundantly clear by now) so I can only try to learn from those who know more than I do. If you can teach me something new, cool. But, as your economic expertise is also questionable, I must rely on others who understand the big picture better than I do. After all, I have an I.Q barely above dog level, but my instincts are pretty good :>)

"And, the bank can, if it wishes, ask you to pay off the balance of your loan or risk foreclosure. "

That was true in the depression era but not now.

"Why do you favor economic policies that put us at a severe economic disadvantage to our 'enemies'?"

What economic policy have I stated that I "favor"?

Okay, if that is not happening now, why all the foreclosures?
Oh, they're foreclosing because people defaulted on their debt by not making payments. Could that happen to our government? I mean, is it possible we could be unable to make our payments on time? Again, I am not an economist so; who do we owe the money to, and how is the debt paid? What can they do if we don't pay. Well, in the case of the Arabs, they buy up America for pennies on the dollar. Like when a big investment bank starts to go belly up and a Saudi Prince buys out a controlling portion of the company's stock. Is this the kind of economy we can thrive on.
And the economic policy you SEEM to favor, based on your comments, is trickle down deficit spending economy.
If not, please state the economic policy we are or should be pursuing that will lead us to that promised land. My contention is that deficit spending and crippling debt is not the way to go, so enlighten me there, please.

With todays mortgage "crisis", there is only a very small percentage of families who are in arrears.

That small percentage was enough to cause the collapse of an investment bank and led to a huge government-backed buyout because it threatened to collapse our entire economy. Do you refer to that small percentage?

"And here is the difference. I have a mortgage, but I also have a job and can keep generating the income to keep paying down the mortgage. "

And following the analogy, the equivalent to your job is the GDP of the nation, which of course is at a record high.

"In our economy, our solution is to have more money printed up, "

This is true of *all nations*. There is no gold standard or similar anywhere in the world

You keep quoting the GDP as if it were an unassailable number and irrefutably the determining factor in the health of our economy.
Again, not being an economist, I cannot accurately explain why the GDP is irrelevant but perhaps you can shed some light here. Why does the crippling debt we have incurred not matter. I remember Cheney famously said such nonsense as 'deficits don't matter'. Yeah, not to him, he's profiting from the war and the economic policies in place. Is that your situation too, Jake? Are you benefiting from the misery of the masses ala Cheney, because otherwise I find it incomprehensible that you champion the current state of economic chaos, simply because some account's trick has a nice GDP number.
Instead of questioning my points, perhaps you could provide some factual information or economic experts you could link to who can explain why crippling debt is better than prosperity and a balanced budget, all because the GDP is a certain number. I am here to learn.
As to the printing of money...ours has been the international standard of trade; when we devalue our money, the other currencies gain vs. the dollar. International markets can collapse if the dollar fails. What we have done with our monetary policy threatens the economy of the whole world...so I think it is important that we have sound policies in place. Right now, we seem too not have them. If the Dominican Republic prints up too much money, the world is not threatened with economic collapse.

"I'll start with the last first. Are you suggesting that the White House has no influence with regards to the types of spending bills brought before Congress, and how vigorously these bills are fought over."

No. It's called the "Bully Pulpit".

"the abject failure of this administration in safeguarding the public monies."

That is not in the job description of President.

"No doubt you would prefer the current situation over the balanced budget and economic prosperity we had under Clinton."

I believe the influence of the President over the economy is quite limited, good or bad. They always take credit when good, and blame previous or an opposing congress when bad. Here isn an article that supports my belief:

http://seattletimes.nwsource.com/html/opinion/2004333380_alexalben08.html

"You can quote all the GDP statistics you like"

Haven't quoted one yet.

"If the economy is so great, why is the income gap increasing at such an alarming rate?"

One has nothing to do with the other. I think most of the discussion about the so called income gap is partisan bluster. But you are changing the subject, I never said anything about the economy being great.

"the answer you run from is that the economy as a whole benefits the rich at the expense of everyone else. "

We weren't discussing that until you just now changed the subject, again, so you are wrong that I have run from anything. You need to stay focused on the discussion.

"If you cannot understand that, that you are part of the 1% who are economically benefiting, "

I'm actually unemployed now. You still haven't addressed debt as a pecentage of GDP, and a few other points.

BTW I do thank you for your civil manner.

And I'm sorry if "going apeshit" offended you. As for looting the treasury, just exactly how stupid can you get with the national debt now larger than the entire aggregate of all previous national debts combined."

Not as a percentage of GDP. That was back in the mid forties.
Your first mention of GDP, so technically not a statistic if s semantic victory means something to you.
And you are correct I (and you) have gone off topic. The topic is: is the war behind skyrocketing oil prices. I say it is, and I cite the manipulation of Iraq's oil and Iran being threatened militarily as powerful contributors to the current crisis...the diversion into sub-prime mortgages was to show the spiral induced by the combination of our military policy leading to market uncertainty and fear and the devaluing of the dollar was accelerated by the sub-prime crisis. These are related in terms of increased debt and the overall economic effect. I'm not sure what your point about the GDP does to address the issue of high oil prices, but if you are saying high oil prices are irrelevant because the GDP is at an all time high, that does not address the issue. That just spits out a dubious 'fact' that you are unable to make relevant to the discussion at hand.

"Your first mention of GDP"

Percentage of GDP is a common way to add context to a number that otherwise sits by itself.

"is the war behind skyrocketing oil prices."

Yes but not solely.

"I cite the manipulation of Iraq's oil "

I haven't looked at their output figures in a while, perhaps we should look.

"Iran being threatened militarily"

I just don't think recent rhetoric on this in any different than a few years back or if the pit traders put any stock into it. If it becomes inevitable that Iran will be attacked we will certainly see a spike.

"I'm not sure what your point about the GDP does to address the issue of high oil prices,"

It doesn't, it was to address a point that was made and often made about a record debt in dollar terms only. That figure alone lacks context.

but if you are saying high oil prices are irrelevant because the GDP is at an all time high, that does not address the issue.

"but if you are saying high oil prices are irrelevant because the GDP is at an all time high,"

The oil prices as it relates to the economy have a great effect I am sure. It is like dragging and anchor behind a ship, and the higher prices being like an ever increasing weight of the anchor. Since energy use can often be used as a proxy for GDP, at least in the short term, then higher prices will certainly effect GDP output if it means decreased energy use, in the absence of any increased efficiency.

I have to address one more issue before I go, and it is a key one, because I believe (with evidence to support that belief) that the illegal invasion of Iraq was all about control of the black gold...Whether we did it to decrease production and raise the price, which benefits those who rule, or increase production to screw with OPEC or just to keep the Russians and Chinese from controlling it. Oil is why we are there.
When you say you haven't looked at the output figures on Iraq's oil in a while, you mean ever. The reason is it is anybody's gues is that Iraq, alone among oil exporters, has no meters on their wells. As I have pointed out in a related post on Commondreams, there is evidence of pipelines being built which go directly to Kuwait and/or Turkey. Who owns this oil? Who decides how much to pump, where to send it, how it is refined, and where is all of that money going? Until we know the answers to those questions, it is impossible to know the extent to which oil is being diverted out of Iraq.
As to your dismissive tone towards the Iran saber rattling...We have several attack boats and aircraft carriers operating just outside Iran's territorial waters, some think with the intent of provoking a fight. Prominent politicians have been publicly speaking out in favor of bombing Iran...most famously John McCain. This is a lot more than just 'business as usual' and has a huge effect on oil prices. This is yet another example of a Presidents ability to impact the economy, your cited article notwithstanding.
Well, it's been fun.

"because I believe (with evidence to support that belief) that the illegal invasion of Iraq was all about control of the black gold…"

It would have been easier to just buy it.

"Whether we did it to decrease production and raise the price, which benefits those who rule, or increase production to screw with OPEC or just to keep the Russians and Chinese from controlling it. "

You should really pick one or the other I think.

"We have several attack boats and aircraft carriers operating just outside Iran's territorial waters, some think with the intent of provoking a fight. "

I understand we've been doing this for a while.

"Well, it's been fun."

Back at ya.

I sat down recently and worked out my budget to find out why I seem to be almost perpetually broke these days despite cutting back on almost everything. Well, it turns out that my fuel costs have quadrupled, my heat bill has quadrupled, my food costs have doubled and in some cases, tripled, my health care costs are through the roof and after everything gets paid off, I have nothing much left to live on. And I make $25,000 a year! Not exactly a minimum wage earner, but this economy has reduced me to living paycheck to paycheck when before, I always had plenty of money leftover each month as a "cushion" against unforeseen emergencies.

I had thought about getting a second job just to make ends meet, but recent hand surgery and the fact that my right leg will be in a cast for several months pretty much prevents that from being able to happen, so I am stuck living on one full time income that no longer meets my needs. I've cut out meals, medication and other stuff just to survive month to month, but that's still not enough. I don't know where else to cut anymore without putting myself in the poor house. If gas gets any more expensive, I will be forced to quit my job because I won't be able to afford to drive to it anymore and there isn't adequate mass transit where I live.

I feel like I am being squeezed to death and I can't do a thing about it. In the meantime, wildcatters and speculators on Wall Street are running up oil futures prices and making huge fortunes, and the Iraq War is consuming so much oil and money anymore that it's bankrupting the US. With the Iraq War, the US has a tiger by its tail - we can't let go and we can't hold on, either. So what is going to happen? Are we going to be paying $6 - $8 a gallon for gas by year's end and forcing people like me to quit long time careers because we can no longer afford to get to our jobs?

Where is the outrage? Where is the calling for heads to roll? Or don't people care, as long as they have their 200 channel satellite TV's and surround sound home theatre systems that eat a ton of electricity each minute? The middle class is a thing of the past and unless we want a two class society of haves and have-nots, then we'd better wake up and do something before it's too late!

It has been fascinating and informative to read the comments above. Thanks to all. Re: the mortgage meltdown. As far as I can tell this problem is very like the savings & loan debacle of the '80's--unregulated dipping into the "cookie jar" to purchase junk bonds or other questionable investments. Mortgage holders or their agents invested in the selling and reselling of these instruments. The common thread between oil and mortgage crises (as happened with the s&l's) is investing in these things on speculation. This was mentioned early on in this discussion. A friend of mine (who is a day trader) suggested that commodities should be paid for by at least half when being purchased, instead of on margin. I don't know all that much about the commodities market, but I do know a thing or two about a balancing and maintaining a budget. Make investors pay for their purchases, just like you and I have to.

The party is over.

The production of oil has leveled off - even decreased. There is plenty of heavy/sour crude, but we dont yet have the refining capacity for that. Too much of our refining capacity is for light sweet oil.

Imagine for a moment, what would happen if the price does not rise. Then people will continue to consume petrol at the current exponentially increasing rate. The reserves would soon be consumed, and then there would be rationing. How do we as a society distribute insufficient fuel. Our method is to sell to the highest bidder. Petrol retailers have to bid more, and if they are not willing to bid more, then they wont have petrol to sell. Those who choose not to sacrifice their way of life must then be prepared to pay more for it.

The oil price bubble may well burst, in the short term - if demand lessens. Because production will not be able to increase in the short term. It may take years until new heavy or sour refining capacity is created. In the mean time the price will go up, unless or until people change their consumption.

And then, in ten years time, heavy and sour will peak also. And people will blame the price rises on speculation, the Saudis, whatever...

@SallyUUKent June 1st, 2008 4:24 pm
Going by your post, you have nearly reached crisis point. You would be better off to make drastic changes sooner rather than later. Foreign debt and war spending will make things get worse yet. The party is over, and you WILL have to sacrifice your way of life, unless the USA itself does something drastic, e.g. reduce its military spending until it is comparable to the military spending of other countries. Otherwise, the price of food, heating and petrol will continue to rise, and your wages may well rise, but they will not rise fast enough to keep pace.

You may have to move into a smaller, easier to heat house or unit. You may have to get rid of your car and use public transport. You may have to move so that you can walk or cycle to work or have move to where you have convenient access to affordable public transport. But if you dont change willingly, then change will eventually be forced upon you, and that would be nasty. It is better to change willingly, while you are in charge.

It would be nice to think that, upon feeling the consequences of military spending, the USA would not immediately make more war. Unfortunately, when people are feeling the pinch domestically, that is the perfect time to make war internationally, and get people to support the war in order to support our troops. People will rally in support. Especially if there is no real danger of the victim country being able to strike back in the same way. War has always made the president's approval rating soar, and the republicans need that right now as we approach an election.

This makes the war with Iran more likely.

It is not really

surely the amount of speculation in the price is equal to the following:
- cost of extraction of most expensive barrel needed to satisfy demand at the current price; PLUS
- an appropriate profit margin, without which the extractor would not extract the oil.

All the rest is - unless I'm missing something - "speculation". However, such speculation is required to keep the price at a level where demand is no greater than it currently is.

Grateful for any guidance on the above logic

It looks like Weissman actually looked at Why Oil Costs Over $120 a Barrel or something similar as part of his research for this piece. If only the majority of those posting would too. It would also be wise of readers to explore the important concept of net exports and how declining amounts from Mexico and Venezuela affect the overall situation. It's remarkable to see folks who are very concerned about Climate Change being skeptics when it comes to Peak Oil. Both are connected, and addressing the latter helps to mitigate the former.

tech2 June 1st, 2008 5:59 am

" there is something strange going on."

The nicest thing we can say about Weissman is that the lemmings often go over the cliff together. On the other hand he may be deliberately presenting conservative ideas within a pseudo-progressive format. It is hard to believe that he is just plain stupid.

All sorts of media pundits are repeating the spin about supply and demand being the primary cause of very high crude oil prices, that is, if you are purchasing the oil with dollars. They never mention Iraq.

One of the original Iraq invasion warmongers was Thomas Friedman, an apologist and propaganda minister (note his Nazi mustache) for Middle East Big Oil foreign policy and endless 'globalization" schemes.

His war cry was democracy and "modernity" for the Arab world, not unlike "manifest destiny" as the rationalization for killing Native American "savages". We have to kill them for their own good.

Part two of the plan was to steal Iraq's resources and create cheap oil while engaging in international war crimes.

He was also foaming at the mouth with the idea of undermining the economies of the evil oil rich Muslim nations by lowering the price of oil. The spin and delusions went on and on and bear a close connection to Israeli Likud policies.

But if you had played a key role in initiating war crimes, would you want to take credit for the results ?

Now Friedman is presenting the supply demand theory as an explanation for war-related energy prices. He stated in a recent editorial, "Truthful Energy Policy", stating, "Prices are what they are as a result of rising global demand from India, China, and a rapidly growing Middle East on top of our own increasing consumption."

And for whatever reason, Weissman is taking the Friedman position.

Neither Friedman or Weissman mention that Iraq's production is down, that sanctions on Iran has limited their production, that the Saudis are not increasing their exploration (some say due to the weak dollar) and that the dollar is in very serious trouble on international currency markets.

It now takes more dollars to purchase the same barrel of oil, and if there is a production crunch at the moment, the devaluation of the dollar multiplies the effects.

Prices are up somewhat and are also complicated by speculation, but the situation is much worse of you are talking about dollars for oil.

http://www.dailykos.com/story/2008/3/15/10846/0435/791/477201

" crude oil prices are moving up and it doesn't really matter what currency the price is in. However, that one day, February 27th, the change in the exchange rates has caused the price of crude oil in Dollars to go up by about twice the amount in Euros."

An interesting read:

http://echochambers.wordpress.com/2008/05/21/petrodollar-inflation-oil-prices-rise-when-the-dollar-falls/

" There is a direct relationship between Dollar value and oil prices. All crude oil purchases worldwide have been conducted exclusively in U.S. Dollars for over thirty-five years. [1] When Dollar value falls via inflation, oil prices rise. [2] [3] [4] This phenomenon could be called Petrodollar Inflation; it occurred during the 1970's oil 'price shock', and it is occurring right now."

And then there is always Gregg Palast who makes a reasonable argument that the purpose of the Iraq occupation is to limit production and drive prices up. If that was not the plan, it has been the result.

http://business.timesonline.co.uk/tol/business/columnists/article3055813.ece

" Production in many oil-producing countries is constrained, not by geology but by politics. Iraq is producing only two-thirds what it did on the eve of the first Gulf war in 1990. That was no golden age, production running below potential because of weak investment during the Saddam era. Iran is producing well below potential."

"Grateful for any guidance on the above logic"

I think you are close.

"All sorts of media pundits are repeating the spin about supply and demand being the primary cause of very high crude oil prices, that is, if you are purchasing the oil with dollars. They never mention Iraq."

I hear them mention Iraq quite a bit, which is really just a factor affecting supply anyway. It was mentioned in the above article:

"A different view is uncomfortable with the apocalyptic element of peak oil theory. From this vantage point, more oil — or close substitutes, like tar sands or shale — is available, but it is harder and more expensive to get. This is the preferred view of the oil industry analysts (many of whom note that much oil that is easily attained from a technological standpoint — for example, in Iraq — is hard to reach for political reasons)."

Fortunately, some governments are responding appropriately to Peak Oil, and refraining from the koolaid jconrad and jakenewton are offering; their suppositions are refuted by much evidence at the first of the links I posted above.

As reported in the ASPO June Newsletter[PDF]:

"The following article describes the new position of the Scottish Parliament, referring to Grangemouth, as they understandably press for more devolution to better manage their local affairs.

The Scottish Parliament today passed a landmark motion on food security which includes for the first time a call to take account of peak oil when planning our future food economy. (1) North Sea oil output peaked at 2.8m barrels a day in 1999, and last year this output was down by almost 60% on that peak. (2) Estimates vary as to when global oil production will peak, with the French Government taking a conservative view that the decline will begin in 2013. (3)

What is not in doubt is that demand for oil continues to outstrip global supply, meaning that local disputes like that at Grangemouth have a disproportionate effect on international oil prices, whilst pressure for biofuels is undermining efforts to tackle climate change. (4) As oil supplies dwindle globally, food supplies in Scotland and around the world are likely to be seriously affected, given the extent to which modern agriculture is dependent on oil.

Patrick Harvie MSP said: "This vote represents another landmark for the Scottish Parliament, the first time that any UK Parliament has accepted the urgency of the peak oil issue. Modern industrial agriculture has been
described as a system that uses land to convert oil into food, whether as fertiliser, fuel for transport, or energy for refrigeration, and Scotland is no exception.

"The recent events in Grangemouth had effects far beyond our shores, pushing global oil prices towards an all-time high of $120 a barrel. There could be no clearer illustration of the vulnerability of our economy to even relatively limited disruptions to oil supply. This dependence is unsustainable in the longer term, and Scottish Ministers need to start turning around the supertanker right now.

"The SNP Government has opened up a discussion about the future of food, which is welcome. There are many smaller measures that they support that we endorse, like farmers' markets and support for local food procurement. However, we have still yet to see any indication that they understand the radical economic and agricultural transformation that will be needed in order to ensure our future food security. We need to see major shifts to support sustainably grown, low-input, healthy and high quality local produce. The alternatives can hardly be contemplated." [Notes and other comment on this are at original link.]

The next item in the Newsletter is more to jakenewton and jconrad's liking. But as Colin Campbell notes, "experience suggests that securing foreign oil supply bymilitary means is not practicable, as it is difficult to produce oil in a battlefield," which is exactly what we see in Iraq, although the Shiite interest in Southern Iraq appreciates it's in its interest to maintain and increase flow rates.

For some reason, the resources available at ASPO, ASPO-USA, theoildrum.com, and energybulletin.net, amongst others are shunned, which is quite odd as these sites all accept the reality of Climate Change, opposed the Iraq War and are very Progressive in their basic political views.

I sent this message yesterday, but for some reason it didn't register. This has been a fascinating and enlightening discussion, especially when people remember to stay civil with each other. I believe one of the reasons for the skyrocketing increase in the cost of oil is because of speculation on the commodities market, plus the fact that it's like an unregulated wild, wild west. The same thing happened with the subprime mortgage market. And does anyone remember the savings & loan debacle of the 1980's? The FTC or whoever is in charge of the market, should demand that speculators pony up at least half of the cost of these investments, and no longer be permitted to buy on margin. What are the chances of that actually happening? Also, it's amusing (not) how supporters of capitalism always claim the market is self-regulating and that when a small business goes under, it's the market weeding out the weak and inefficient businesses/industries. That is, of course, unless you happen to be Chrysler, or Bear Stearns, or the s&l industry, in which case the government (read: taxpayers--you and I)is supposed to bail you out to keep the economy from becoming worse than it already is.

@francis.coles June 2nd, 2008 12:11 pm
"surely the amount of speculation in the price is equal to the following:
- cost of extraction of most expensive barrel needed to satisfy demand at the current price; PLUS
- an appropriate profit margin, without which the extractor would not extract the oil.
All the rest is - unless I'm missing something - "speculation"."

You are asking the right question. Your question gets right to the heart of the matter.

No, it doesnt work that way. It cant work that way without rationing. There is no "appropriate" profit margin. Without rationing, the oil that is available gets sold to the highest bidders, regardless of whether the profit margin is high or low. What determines the price of oil is what people are willing to pay for it. You, the consumer shops for the lowest price (if you can be bothered). Those selling crude will sell it to whoever is willing to pay the most.

Now the production of the sort of oil that we are well equipped to refine (light sweet crude) appears to have peaked. The supply cannot easily be increased, so there isnt enough to go around at a lower price. If the price was lower, then more people want stuff than can be given. The demand cant be satisfied at a lower price. If you sell it all to Jack, at a lower price, then Jill says, "Hey, Im willing to pay more". So you sell it to Jill, and of course then Jack has to pay more. While people are short and willing to pay still more, the price goes up. As the price rises reaches the point where people prefer to do without rather than pay, then demand reduces. The price has to go up until it reaches the price where demand equals supply. That is the market price. Basically, we all have to pay the market price. The futures market may complicate this, but it cannot change the big picture.

How to fix our oil mess

How strange. U.S. oil consumption is down yet prices continue to increase at the pump ?

From: EIA Energy Information Administration

May 6, 2008

http://www.eia.doe.gov/steo

" Consumption: Total petroleum consumption of liquid fuels and other petroleum products averaged 20.7 million bbl/d in 2007, essentially unchanged from 2006 (U.S. Petroleum Products Consumption Growth). Based on projections of weak economic growth and record high crude oil and product prices, consumption is projected to decline by 190,000 bbl/d in 2008, a sharper drop than the 90,000 bbl/d decline projected in the previous Outlook."

note: One of most widely read columnists on earth is claiming that American consumption is growing. Friedman says, "Prices are what they are as a result of rising global demand from India, China, and a rapidly growing Middle East on top of our own increasing consumption." But of course the New York Times also promoted the WMD lies.

And like Friedman, Weissman wants to blame high prices on the Chinese and India who consume a fraction of what the United States consumes. This is spin city !

Give this blog a bit of thought.

http://economiclogic.blogspot.com/2008/05/oil-price-problem-is-dollar-problem.html

" We can see clearly that gas prices have increased much less in Germany in euro terms than anywhere in dollar terms. Two thirds of the US increase can be attributed to the weak dollar."

" That more than half of the increase in the dollar denominated price of crude oil is due to the weakness of the dollar, and less than half to the actual increase of oil prices. So much for blaming China and India, the real culprit is the US dollar. "

And prior to the invasion if Iraq the Euro and the dollar were nearly equal for purchasing oil. Not so today as presently one Euro will purchase $1.56 dollars.

My opinions and information do not offer a "koolaid" solution for the complex realities of long term global energy requirements and supplies. We have to make changes as I would guess that if all of the various carbon fossil fuels in the earth were extracted and burned, the atmosphere would be more or less destroyed.

The main point related to this "skyrocketing oil prices" article that I am stressing is that the current and rapid increases in the cost of energy for Americans is not due to a dramatic shortage in the global supply of crude oil.

My primary reason for bringing these ideas forward is to point out the insanity in both human and financial terms of using military force in violation of international law to secure oil reserves for the benefit of American oil corporations in addition to the profiteering of the MIC.

Example: We could be well on our way to a solar infrastructure to energize zero emission electric cars with the $5 Trillion wasted in Iraq.

Anyone writing about energy inflation in the good old U.S.A. who does not take into account the devaluation of the dollar or the invasion and occupation of Iraq is either incompetent or has a hidden agenda.

And then here is the Enron style unregulated trading and the manipulation of supplies:

http://www.nakedcapitalism.com/2008/05/soros-skyrocketing-oil-prices-bubble.html

Soros: Syrocketing Oil A Bubbble

Veteran investor George Soros, in an interview with the Telegraph, describes speculation as a significant factor in the recent spike in oil prices.

Speculators are largely responsible for driving crude prices to their peaks in recent weeks and the record oil price now looks like a bubble, George Soros has warned....

"Speculation...is increasingly affecting the price," he said. "The price has this parabolic shape which is characteristic of bubbles," he said.

"Until recently, US energy futures were traded exclusively on regulated exchanges within the United States, like the NYMEX, which are subject to extensive oversight by the CFTC, including ongoing monitoring to detect and prevent price manipulation or fraud. In recent years, however, there has been a tremendous growth in the trading of contracts that look and are structured just like futures contracts, but which are traded on unregulated OTC electronic markets. Because of their similarity to futures contracts they are often called "futures look-alikes."

And:

"Finally, some suppliers may simply be choosing not to pump."

"It is being left in the ground."

"And then here is the Enron style unregulated trading and the manipulation of supplies:"

You can't reliably manipulate supply when your competitor reacts against you by doing the opposite.

"Soros: Syrocketing Oil A Bubbble

"

So does he think the bubble will pop short term? Oil prices have taken a big hit in the last couple days. I know that doesn't mean anything in so short a time frame but still. The financial media blames unexpected surpluses in inventory and recent decrease in consumption.

Jake, if you listened to the news friday, they are saying that the biggest single day spike in oil prices ever was due to comments by officials in Israel saying that an attack on Iran appears to be unavoidable. I would say that was pretty solid evidence that the threat of war with Iran MOVES THE MARKET! Nuf said!