By Cliff Montgomery – May 31st, 2009
Oil prices soon will post their greatest one-month spike since May, 1999. It’s still too early to determine if thissharp rise will usher in a repeat of last year’s fiasco, when oil prices zoomed up to $147 a barrel. What is clearis that the price of crude may well continue to increase through June.
It seems that speculation on future need–that is to say, old-fashioned Wall Street gambling–is at the center ofthis sudden rise in crude prices. It is the same reason the overall stock market recently has been postinghigher numbers.
The fact that such wild-eyed gambling was one of the top reasons for America’s financial meltdown clearly hasnot been understood by this country’s wealthy elite.
But why should they understand it? When they make great financial mistakes, those mistakes are paid for byU.S. taxpayers, not by the wealthy themselves. And people who do not personally suffer for their mistakes willnever learn from their mistakes.
Regardless, this speculation may grow as Wall Street types gamble on two things:
1.) That the northern hemisphere will experience a cold winter
2.) And that China and India will increase their demand for crude thanks to a quick economic rebound.
The immediate result of such gambling?
“Oil prices may be the greatest enemy of the recovery,” stated the Internet source 24/7 Wall St.
“If consumers and businesses are forced to take whatever improving income they have and put it towardoil-based products or gasoline,” continued 24/7 Wall St.,” that may suck the life out of a rise in discretionaryincome.”
Thus any immediate, hoped-for recovery from Wall Street’s arrogance and incompetence is almost certain tobe destroyed…by Wall Street’s continued arrogance and incompetence.
