On 10/28/07, Jim Devine <[EMAIL PROTECTED]> wrote: > I think I've posted something like this to pen-l before, but it's worth it. > > Is it possible that someone in DC, somebody powerful like Dick Cheney, > causes foreign-policy events (the tightening of pressure on Iran, the > "Armenian genocide" resolution in Congress) that he knows will cause > oil prices to go up? if he can pull this off, , thanks to the magic of > speculative markets, it's easy to make a killing by buying oil > futures.
That sounds unlikely. Someone like Dick Cheney can move markets in many different ways if he were so inclined. Why would he do something this much clumsy? My own theory is that in the last 5 years at least, oil price variations have had little to do with variations in the supply and demand for oil, but instead to do with variations in the movement of investment money across markets. Some commentators call it the speculation premium. But thats perhaps an understatement. Maybe it is not so much that oil gets repriced in the oil markets - but rather the dollar. From oil being on the dollar standard, maybe now the dollar is on an oil standard. I find it a very intriguing hypothesis. Not sure if there is any scholarly work on the connection. -raghu.
