DK,

Excellent impactful dialog, Prof Prabhu Guptara has done very well and what he speaks of is very clear. A few good points from the authors of "What is the Right Price for Oil?" however it is a bit on the opaque side.

I know that management does not have the data needed manage the systems because they did not arise from holistic intention and have not evolved because to do so would create transparency, transparency helps to eliminate the insider advantage.

The GAS PUMPS are not running dry, so demand has not exceeded supply at least from a logical perspective. Sure there may be a perceptual demand exceeding the perceptual supply. Should we base things on reality or perception?

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“Another use is that one expects the price to rise, so that one wants to make a "killing" in the market by selling off the position at the right time, with no real interest in the fundamentals or even in the product represented. This kind of "momentum trading" was at least one proximate cause of the so-called sub-prime crisis -- which was simply the soft underbelly of the housing price bubble -- a symptom of a whole system fundamentally out of touch with reality ~ Prof Prabhu Guptara
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Exactly.

Let’s see if I can articulate it further.

Speculators a nice name for Gamblers provide no economic value to other economic system participants, and create no value to justify their extraction of wealth and I think this would actually contribute to Inflation. These Gamblers destabilize the markets and serve only themselves not the rest of humanity. Furthermore they do not promote transparency and take advantage of insider knowledge or manipulation to generate their wealth.

From Wiki: Financial speculation, involves the buying, holding, selling, and short-selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives, or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest.

If this was just a casino game it would not be so serious but the REAL effects seem to be great suffering, conflict and strife and the death of children.

I think this game is coming to a close and all should embrace their truth, not the fictions, otherwise it will be embraced for you, if it isn't happening already. :)

As a consolation I think it we could have tax free dividends to create an incentive for holistic investment.

I think the following article explains an awful lot of it:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/19/bcnsaudi119.xml

When Saudi Arabia broke their dollar peg, the greenback slid down to its true value, unassociated with oil wealth.

Not very complicated stuff. True wealth--for a very long time--has been associated with oil OUTSIDE the US. As soon as the currency peg was broken, there was a mass exodus of capital from dollar-denominated assets to oil itself.

But what was the US's most valuable resource from an international perspective? Something that could be moved around without regard to treaties or regulations?

Saudi Arabia "spun off" the United States as soon as they could get our MILITARY ASSETS placed under their jurisdiction. It's a beautiful scam: the US taxpayer is bearing the debt incurred with a huge military, while, in effect, handing it over to the oil barrons as a value guarantee!! Just like the US factory worker who is forced to pack up his company's equipment bound for China, we were forced to pack up our military and hand it to Saudi Arabia.

Kurt Vonnegut, in his book Hocus Pocus, depicts a United States that is being emptied of all its wealth. A mere shell, bankrupt.

And here we are. Paying nearly a third of our federal budget for a military that is no longer even ours!!!!!!!!!!!!!!!!

Sorry, I misspoke. The dollar peg is still intact, but Saudi Arabia's refusal to match our interest rates makes it, in effect, a worthless match.

In other words, the current run-up in oil has absolutely nothing to do with oil and everything to do with the US dollar.

When George Busn lost the Iraq war, there was a mass flight from the dollar...everyone knew what the war was really about and that Rumsfelt had lost it single-handedly.

How do I know we lost the Iraq war? The market told me.

The market knows.

This is probably pertinent to the discussion.

I had written almost two years ago how one degree makes a difference because this is all it takes to change the state of water from a solid to fluid. It seemed this wasn’t being taken into account and is why “experts” kept saying this is happening faster then we expected.

So I add to the One Degree makes a difference a new factor and that is Evaporation. One degree results in a major suspended volume increase. The more water that goes up, the more water comes down. When these values are plugged into the model we see 2 – 3 mile wide rivers coming. Not for certain, just a more probable possibility if the trend continues. Deterministic chaos is unpredictable with any precision over a long term.

All this combined with the increased energy influx and retention which increases turbulence (increased temperature = increased phonons). The increased turbulence spawns more vortices (tornados, micro vortices), so there is an increase in number and intensity.

It is not really that complicated at a high level just common sense logic and doesn’t require millions to be spent on research. Yet all the factors combined create a hard to predict and understand system.

All these factors mean major changes in weather patterns and more extremes excessive moisture and a lack in other places. The only solution is to be mobile and adaptable and move with the climate change like the animals as was pointed almost two years ago are already doing.

It seems that the previous projection that there would be increased localization is actually happening.

Local is Green.
(That is a meme I had launched and it is spreading)

Flooding is good it replenishes the surface soil naturally. Permanent structures and dams are not natural.

Fires are also a natural cycle and are good.

The Human Civilization with everything from marriage to infrastructure to petroleum based fertilizer and factory farming is in conflict with nature.

One can see who is losing in this conflict.

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Members of congress should quickly draw up a bill to slap a 70% tax on short term capital gains, those that try to profit simply from market fluctuations rather than dividends. In other words taxing the Gamblers (Speculators) that are disrupting the system (read DK's thread).

They should call on the farmers to plant Amaranth right now, it is JUNE wait and we are screwed, maybe that is how it supposed to create the incentive to break the ego barrier.

Amaranth is worth 1,000 per acre; just about every other crop only produces on average $120.00 per acre if I remember my numbers correctly. It is the most complete nutritional crop on the planet, the two missing essential amino acids and it even has vitamin C. It grows in poor soil and drought conditions, and it is very pretty.

We can implement the universal health protocols and cut health insurance premiums in half right now and reduce taxes some 25%.

You know what Monsanto wants to do? They want to create a monopoly product with a drought resistant gene inserted. Guess what we have Amaranth, it already works, better than anything they could invent, we do not need that to invent anything. This is exactly what the President of the United States should be saying right not if they were to have a clue and did not have a circle of influence deceiving them.

Then there is another group trying to invent a better fertilizer yet we already have it rock dust and sea weed.

This is how profit driven perspectives fail to achieve the optimum, with the desire to create monopoly.

The headline reads “G8 split over cause of record oil prices”.

That’s speaks volumes doesn’t it, how can one manage, control and regulate a system that is opaque? How can the world’s management pretend to be managing something it doesn’t understand? What could be so complex about a series of transactions? Or is that some do not want it to be understood?

Here is an insight for all of you.

How could oil companies get around the anti-trust laws and all raise oil prices higher?

Use a third party to raise there oil prices in concert, this way no one can put the finger on the oil companies for setting prices high.

Of course the high oil prices are a good thing creating a lot of awareness and change while eliminating a single point of failure for humanity.

Competition law, known in the United States as antitrust law, has three main elements:
prohibiting agreements or practices that restrict free trading and competition between business entities. This includes in particular the repression of cartels.
banning abusive behavior by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, refusal to deal and many others.
supervising the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to "remedies" such as an obligation to divest part of the merged business or to offer licenses or access to facilities to enable other businesses to continue competing.

I am thinking both capitalism and supply/demand play an important role in the oil price. Maybe those are both different aspects of the same thing, tho. But this is about the "main" reason. Unless you want to count the oil that is seeping into my water well, I can't really do anything about supply. And I think when market regulation was recently tried elsewhere in the economy, the capitalist just hopped over to a foreign market to trade. But I can drive my car less. Even if it doesn't affect global demand much, it will be easier on my wallet. Back in the seventies, people argued we didn't need to take any action, because the market would fix it for us, if necessary. They ridiculed Jerry Brown and called him Gov. Moonbeam. The market can be cruel, but that is when the decision to be here was made first. Prof. Guptara may be right, those oil prices could go down alot almost any day now. But I think they will be back up soon enuff.