What a great day – oil just closed at UNDER $100! So much for Peak Oil. This is the free market at work, though many do not understand how it happens. Oil prices go up. Gas prices go up. People cut back on their driving. Companies look for and find oil. Oil prices go down. Soon… gas prices will go down.
Watch eggs – the same thing happens. Prices go up and down regularly. Also, the government doesn’t try to control egg prices, the way they do with dairy products.
The only way prices can go up, absent demand or supply changes, is when government starts messing with the money supply or institutes price controls. BTW, the article says Nixon’s imposition of price controls was “widely applauded by the public,” but we can tell you, not in our household at the time!!! The article also notes: “The initial attempt to dampen inflation by calming inflationary expectations was a monumental failure.”
Our domestic product prices will go up since the government has increased our money supply, but oil is an internationally traded commodity. The quantities are as huge as the ocean. Nobody can hold back the tides.
The same things influence gold prices. Today, gold is also down to $1473. That’s about $100 lower than it was just a few days ago, IIRC.
Oh, right – the stock indexes are all down, too. Again, so much for the glories of diversification.