Monday, July 17, 2006

Inflation at 4%

And its due in large part to the enormous security premium we are now paying on petrol due to instability in the Middle East.

I blame George Bush...


Actually, I've been reading Greg Palast's new book, and there's another reason to blame Bush...

Apparently, Clinton made a deal to with OPEC to keep the price within limits by threatening to release the US strategic reserve. Bush and Cheney prefer buying in.

I remember seeing a review of a Bush biography. Apparently he considered running for President with the line "Let's put a friend of oil in the White House"

And yes, from that point of view, Iraq is going just swimmingly.

Posted by Lyndon : 7/17/2006 05:24:00 PM

Don't forget the role of the UK Labour Party - you'll hurt Mr Blair's feelings if you give Bushy all the credit!

Posted by Anonymous : 7/17/2006 06:44:00 PM


OPEC is no longer a player they way they were 8 years ago. OPEC manipulated the market by not working at full production - then they could increase or decrease production to shift the price. But they went to full production almost 18 months years ago now to try and keep prices down - and failed. So they've no more power to manipulate prices now.

Saudi Arabia thinks long term - they don't want a petrol crisis as it encourages people to look at alternative sources of energy.

BTW: releasing the USA's strategic reserve when there are threats of global petrol shortages would be really dumb. Prices are high because people fear what might happen in the gulf: but if the worst does happen then the USA will need its strategic reserve. It's there for emergencies, not to help manipulate the market.

Posted by Icehawk : 7/17/2006 07:41:00 PM


that should be "18 months ago" in the above post.

Posted by Icehawk : 7/17/2006 07:43:00 PM

I blame the New Zealand Government.

The fact that we have no plan to reduce our dependence on expensive oil imports, and move to a less energy intensive economy means that we'll be stuk with the effects of a high oil price for a long time to come. Increasing global demand combined with dwindling reserves are the real reason the prices are, and have stayed, this high (ie 'Peak Oil').

We desperately need a Government that can look more than 6 months into the future. Still, its not too late to hope!

Posted by Anonymous : 7/18/2006 08:31:00 AM

You might also wish to bring rigourous economic analysis to the issue of oil price, especially in the area of DEMAND for oil. There's the small matter of rapidly expanding demand for the stuff, without comensurate increase in supply.

I know, I know, blaming Bush is more fun.

Try here:


Posted by Anonymous : 7/18/2006 10:14:00 AM

I realise it's late and nobody will read this, but I can't resist:

"Asked whether OPEC could make up for any possible reduction in oil exports from Iran because of the Israel-Hezbollah conflict, Daukoru said the organization had plenty of spare production capacity."

Posted by Lyndon : 7/20/2006 03:51:00 PM

Thanks Lyndon - that's ... I guess funny is the word. And I for one read basically every comment anyone makes on this 'blog.

Posted by Graeme Edgeler : 7/20/2006 04:04:00 PM