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Of Egypt, rising crude oil prices and uneasy heads of state

Of Egypt, rising crude oil prices and uneasy heads of state
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First Published: Fri, Feb 04 2011. 09 33 PM IST
Updated: Fri, Feb 04 2011. 09 33 PM IST
Mumbai: The past week was dominated by headlines of the violence in Egypt and rising crude oil prices. A favourite theory, not least among the Left, is that the US props up dictatorships in West Asia to keep oil prices stable since the American public can’t do without cheap gasoline.
At oilprice.com, blogger Llewellyn King takes this argument to the extreme and says that rising crude prices could spell doom for US President Barack Obama. He argues that the price of oil is subject to various forces such as wars, rumours of said wars, Iran’s nuclear plans, hedge fund involvement and “even corrosion in the Trans Alaska Pipeline System”.
The “reality is that the world thirst for oil has not been slaked; as the world prospers, the greater that thirst. In 1974, the heads of 23 democracies lost their jobs because of surging energy prices. Obama, beware,” King wrote. You can read the whole piece at http://tinyurl.com/4ay7fsf.
Others in the blogosphere have chosen to draw parallels on the tensions in Egypt to what could happen in the developed world. At zerohedge, blogger Tyler Durden quotes a note from the National Inflation Association (NIA) of the US asking whether “Egypt (is) a preview of 2015 America?”
“The rioting and looting currently taking place in Egypt is primarily a result of massive food inflation and shows what all major cities in the United States will likely look like come year 2015 due to the Federal Reserve’s zero percent interest rates and quantitative easing to infinity,” he writes in the blog, which can be accessed at http://tinyurl.com/4knjaza.
Across the world, economists and bloggers alike are still arguing over the benefits of quantitative easing and classifying themselves under titles like “inflationistas” and “deflationistas”.
Stephen Gandel in Time magazine’s Curious Capitalist blog asks the provocative question: “Is Inflation Good for the Economy?”
“There are growing signs that inflation might not be as bad as people think. In fact, rising inflation, or at least the fear of it, might be the best thing this economy has going for it these days. It might even boost employment. Call it, stimulus part trios,” Gandel writes. Read more at http://tinyurl.com/6br2rkb.
Finally a bonus: Bond trader turned author Michael Lewis has gathered a lot of kudos for his insightful and entertaining books such as The Big Short and Liar’s Poker. However, even he found himself sitting on toxic assets in the fall of 2008. Check out http://tinyurl.com/5rsnwrq for ‘How “Big Short” Author Michael Lewis Got Duped By Wall Street’ by Daniel Gross at Yahoo Finance.
ravi.k@livemint.com
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First Published: Fri, Feb 04 2011. 09 33 PM IST