PeakOil is You
Do bear markets destroy wealth?
Re: Do bear markets destroy wealth?
by yesplease » Sat 23 Feb 2008, 20:48:43
$this->bbcode_second_pass_quote('MrBill', 'T')here is no way you can tell me that these countries and others are being held hostage by either oil producing nations or oil companies.
I'm not talking about switching entirely to other sources, or just oil companies/oil producing nations. What I'm referring to are those who benefit, I would say disproportionately, from oil, via conspicuous consumption. Another recent example of leveraging, well... whatever, in order to gain disproportionate wealth is part D of title XVIII of the Social Security Act that prevents negotiation for prescription drug prices by the HHS Secretary. This is addressed in H.R. 4. $this->bbcode_second_pass_quote('MrBill', 'O')il companies are quite happy to use their cash cows to pay their shareholders dividends and do share buybacks with their extra revenues. They have no incentive to encourage consumers to use more oil or to consume it at a faster rate.
What I'm referring to are blatant and transparent efforts by those who benefit from high prices, that have, coincidentally or not, gotten us to a state where high prices are the norm, in this case a peak. This is by no means just about oil companies or nationalized operations, as we would expect, given GM, Bridgestone, and Standard Oil were found guilty of criminal conspiracy in the "Great American Streetcar Scandal". These companies take great lengths to use plausibly deniable method, with good cause. It's possible that American car companies, with their majority shareholders, various financial institutions who also own quite a bit more in "oily" assets, were and are bypassing CAFE and making inefficient cars because they think that, perhaps, it's a good thing for Americans to spend more of their wealth on transportation, or that larger vehicles can always sell, regardless of fuel prices, if they just discount them enough.
All that behavior could plausibly be coincidental. But regardless of whether or not it is, it's definitely profitable, on the whole, for those who benefit from oil sales, compared to if these companies hadn't produced vehicles with a fleet average of around 15mpg for the last three decades give or take. Regardless of whether or not it was intentional, increasing the consumption of the largest consumer by a good 75-100% for decades is definitely an investment in the future given today's high prices. Sure, there may be some shady happenings, as well as the whole GM/EV/Ovonics/Cobasis/Chevron deal. Possibly coincidental, totally legal, and in retrospect quite profitable. 
$this->bbcode_second_pass_quote('MrBill', 'S')o it is really those oil producing nations that would suffer if the world all of a sudden no longer needed their crude. But how likely is that to happen? Not very! ; - )
$this->bbcode_second_pass_quote('Professor Membrane', ' ')Not now son, I'm making ... TOAST!
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yesplease - Intermediate Crude
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