Price increases will be attributed to greed. (I didn't know businessmen were so generous in the 1980s and 1990s.)Meanwhile Ed Wallace offers The Reason for High Oil Prices:
It's not a supply crisis that explains the sharp spike in oil prices. It's unregulated commodities markets and greedIsn't it amazing how strictly regulated markets were in the 1980s and 1990s? Isn't it even more amazing how generous businessmen were?
Commodities have often been the refuge for investors who have lost money on equities or fixed-income investments. Moreover, the commodities rush today is not limited to oil; now we also have runaway food and feed prices. Could it be that all the financial losses on subprime mortgages, plus the anticipation that the option ARM mortgages about to reset could be an even bigger problem, combined with the huge losses in securities last year, are why investment money today is flooding into often unregulated commodities, where the demand pricing of the final goods is inelastic?In other words, it's not an increase in commodities; it's a decrease in the dollar.
I'm reminded of two classical quotes on high prices:
Thomas Marshall - “What this country needs is a good five-cent cigar.”
Franklin Pierce Adams - “There are plenty of good five-cent cigars in the country. The trouble is they cost a quarter. What this country needs is a good five-cent nickel.”