The only assumption you need to make is that the ongoing trend will continue. How steep the curve is depends upon if you are looking at the 12 month trend or the 24 month trend. We’ll see 200 $/brl by Xmas on the 12 month average increase, and around the middle of next year at the 24 month speed.

It requires a great deal more of insight to figure out what would be:
• a significant enough decrease in demand for oil to halt the present trend, or
• by how much production would need to be increased before a balance is reached, and price of oil would stop rising.

Are there any good arguments out there that this balance has now been reached?

Please describe how it helps the American middle class when they are forced to bail out creditors of Bear Stearns. Be specific, because I am quite sophisticated financially but it’s not clear to me.

Those members of the middle class should have some say in the matter. Why not hold a referendum, rather than have the Fed decide what’s best for us? Presumptively, those creditors’ losses should be their losses not ours.

One of the more important issues is how the governments of the world will deal with the speculation on crude oil futures.

This matter deserves considerable attention. While few may support government intervention in principle, rest assured that collapsing economies or portions thereof will not be tolerated.

—

sorry.my.space.bar.is.broken.

north.korea.counterfeits.dollars.,

they.say.,by.printing.

but.bernanke.debases.the.dollar.by.fiat.,

electronically.

the.trouble.really.starts.when.the.dealers.value.the.korean.issue.more.highly.than.the.u.s.electronic.dollar.knowing.that.the.koreans.cannot.print.as.fast.as.bernanke.can.wave.his.wand.

then.the.counterfeits.become.a.harder.currency.than.the.feds.own.electronic.entries.

and.north.korean.greenbacks.become.a.sort.of.swiss.franc.of.the.far.east.

if.this.sounds.like.madness.,madness.is.where.we.are.at.

of.course.the.north.korean.policies.are.illegal..(for.more.of.this.see.recent.fed.policies.)
.

Ummm…. Yes….

DC: Should Americans trust unelected officials like Bernanke and Paulson that pander exclusively to the narrow economic interests of Wall Street investment banks for a “cheap money” monetary policy?

Trust no one, including the people that tell you to trust no one. People have to look at all sides of an issue, and hear from multiple perspectives before making up their own minds. Part of the reason I blog as much as I do is that I’m the closest thing that most people are likely to get to hearing the point of view of someone associated with “Wall Street banking interests.”

Expensive oil and inflation are a direct result of Bernanke’s decisions, but had Bernanke made different decisions, the results I think would be far worse. If you have tight money then you end up increasing unemployment and triggering a cascade of bank failures. Most people in the US have relatively few liquid assets outside their house, and depend on employment for economic survival. This biases things toward loose money.

DC: Do Wall Street bankers deserve a federal taxpayer bailout for financial loss?

Well they aren’t going to get one. During the events of mid-March, a lot of the discussion was on how best to punish Bear-Stearns, which is why the initial stock price got set at $2/share. Lots of people at Bear got their retirement savings wiped out and there are layoffs happening all over the place. So it’s not as if Wall Street bankers are all making money off of this. They aren’t.

Oil went from $30 to $140
Gold went from $280 to $1000+
The US Dollar Index fell from 110 to 73

If this all seems counterproductive to you, it’s because it is.