I'm not sure if any of you saw the news, but Congress voted today to sue OPEC for conspiring to restrict supplies and manipulate the oil market. What a total joke.
The continued oil spike is really starting to pinch us and cause pain. Whether these crude oil prices are caused by hedge fund speculators or supply and demand does not matter. What matters is that OPEC and other oil producing countries OWN US and all net importing oil countries. They have the supply of goods that we need to run our economy and get from place to place.
If you've ever traded the oil markets, you know that it's based on emotions and "data" on supply and demand. But if you've traded oil you also know that there is not accurate data on supply and demand. Oil producing countries are extremely secretive about their production capabilities and their oil stocks. Some random comment by some leader in an OPEC country about oil will cause a spike. Some shooting near an oil pipeline will cause a spike.
It is going to continue to be painful while this all gets sorted out.
However, we in the United States have no control of it. We are owned by OPEC and other oil producing countries. They have it and we want it. We can try as much as we want to strong arm them or use geopolitical or other economic forces to threaten or appease them. At the end of the day we can't change one key fact - they own us.
They can grind our economy to a screeching halt. It is going to be painful to see all of those businesses that depend on oil go bankrupt - airlines, transportation, etc. It is virtually guaranteed that a lot of them will go out of business.
The flip side is that it is finally a great time to start developing alternative energy and a new way of life. I can remember only a few years ago that people thought the concept of a hybrid vehicle was ridiculous and not worth the price. Now a days it is all the rage.
Those companies and entrepreneurs that have been waiting on the sidelines to make their move should take advantage of this great opportunity. Where there is pain there is opportunity.
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