May 02, 2006

Blame China (Again)

A lot of hoopla about the "Today Show" interview with Senater Majority Leader Bill Frist and his explanations about why America is in another oil crisis. Frist revived the tired talking point from last year about demand from China and India being a lead cause of the increase in oil prices. This is part of the simplistic "supply and demand" and "peak oil" argument.

But oil consumption FELL almost all last year in China. And India, oh yeah, they drive so many SUVs over there, you know.

Peak oil is a myth. Oil prices are financial and futures speculation, nothing more. Oil = dollar. The goal here is to get Americans to pay prices on parity with the rest of the world. It helps prop up the dollar against the Euro and the eventual strong Yuan of the future. And it forces Americans to either consume less or save more, the goal of all the financial capitalists. In the future Chinese will spend (on their own country's manufactures) while Americans will save in the midst of a prolonged but soft economic depression.

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