First an arsonist will start a fire.
Then, when it’s not burning fast enough, he’ll throw another can of gasoline on it – or even use a gasoline-filled hose.
“If [the rising price of oil] plays through to the broad economy in a way that portends a recession, I would take a position we would respond with more accommodation,” Lockhart said at the conference.
Of course the reason oil prices are going up is the speculative premium caused by QE and QE2 in the first place.
Bernanke and others argue that oil prices are going up because of a “strong recovery.” Ok, let’s say I buy that (I don’t.) Then more QE would make it even stronger, and thus make oil prices go even higher!
Pick one folks – whether you believe in the BS or not, the fact remains that more asset purchases will do nothing other than make oil prices go up more.
This might have something to do with all the open interest on the 150 and 170 strike for oil going out a few months. Not that I blame speculators for this – if you have an insane man who starts fires in the price of commodities (more than a 100% increase in the price of basic foodstuffs in Egypt, for example, over the previous 18 months and a 150% increase in total inflation over the last three years) and this ignites civil unrest you can hardly blame people for buying CALLs on oil when the same jackasses say, in effect, “The fire’s burning pretty good, but by God we gotta make sure it doesn’t go out – hand me that gas can Bernanke!”
These people are financial arsonists. They simply don’t care what happens to anyone but their friends the banks and the banksters who skim off billions in bonuses.
And incidentally, $4/gallon gasoline is pretty much baked in the cake. Here’s RBOB:
Now add various sales and excise taxes on gasoline (averaging around 50 cents/gallon) and transportation costs and you’re over $3.50/gallon – about where we are now.
There’s nothing about the timing of the ramp in price on gasoline that happens to coincide with QE2, is there? Oh wait…. there is.
Hmmm…. so Lockhart wants to “respond” to the spike in oil price by making it worse?
Sounds good to me.
Remember who said this when you’re paying $5 and up, and exactly who’s responsible:
The Federal Reserve and their enablers, Barack Obama and the US Congress.