Oil, Dollar and Comon man ...
Yestrday dollar touched a new high in recent years and moved to 48+ Rs. And at the same time oil touched a new low in recent years some 82§/barrel. I have been observing that for some days as the dollar rate fluctuate oil rates fluctutes in opposite direction. Few months back when Oil touched all time high 147§/barrel dollar was at its lowest rate in the recent years. As per different economist as oil is evaluated in dollars as dollar goes down few individual/institution holding currencies other than dollar invest in oil which makes it fluctate. Now this observation is interesting, very confusion and highly disturbing at the same time.
Its interesting as oil doesnt seems to be following usual supply and demand theory. May be supply and demand ratio has not fluctuated as much as publicised. Its dependent on American dollar which is dependent on Amrican government policies. Like at the moment due to all the bailouts the scarcity of dollar in the market making it costly. Before it was very low apparently due to low interest rates and other policies of government which let people consume more and more(i am completely sure of exact reasons).
Its confusing at the same time, as I am unable to understand how come oil doesn't follow normal supply or demand theory ? How come oil bought on papers by few individual/institutions holding currencies other than dollar determined the market cost of Oil. Its like saying if share of Britania Group goes up the cost of biscuits rise. Well I am not economist and I still find myself completely confused.
Now, its highly disturbing. Few individuals determine the market cost of the oil and it effects badly the common man. Its only few month when we were going through one of the worst crisis oil rise, food cost, etc. All the presidents/U.N. etc, etc came together, gave assurance and now we have all forgotten it. It seems to be the thing of past. I feel as if we were made fool, just for some profit makers.
May be to come out of this new financial crisis we need another big crisis of something else.
Its interesting as oil doesnt seems to be following usual supply and demand theory. May be supply and demand ratio has not fluctuated as much as publicised. Its dependent on American dollar which is dependent on Amrican government policies. Like at the moment due to all the bailouts the scarcity of dollar in the market making it costly. Before it was very low apparently due to low interest rates and other policies of government which let people consume more and more(i am completely sure of exact reasons).
Its confusing at the same time, as I am unable to understand how come oil doesn't follow normal supply or demand theory ? How come oil bought on papers by few individual/institutions holding currencies other than dollar determined the market cost of Oil. Its like saying if share of Britania Group goes up the cost of biscuits rise. Well I am not economist and I still find myself completely confused.
Now, its highly disturbing. Few individuals determine the market cost of the oil and it effects badly the common man. Its only few month when we were going through one of the worst crisis oil rise, food cost, etc. All the presidents/U.N. etc, etc came together, gave assurance and now we have all forgotten it. It seems to be the thing of past. I feel as if we were made fool, just for some profit makers.
May be to come out of this new financial crisis we need another big crisis of something else.
posted by Tanuj at 6:13 AM
1 Comments:
if you go back 2-3 decades back adjustments are done on national level or between the the leaders/powerful peoples (industralist, comm. agents etc.) but now on international level / global scenario i think all industralist and comm. agents have joined hands and making large profits by exploiting common and poor peoples
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