Why Oil Prices Are So High
- Thread starter taxhonesty
- Start date
:salam2:
I heard an interesting theory on this from an economist.
He basicly says at this point in time it's in U.S. interests to have high oil prices.
With the sub prime issues bank lost a lot of their liquidity. Meaning they don't have cash on hand anymore to fund loans buyouts, etc. So these American banks need more cash. With high oil prices lots of cash from the Europe and Asia makes it into Opec countries, the Arab members place a lot of this money in U.S. banks.
This is actually what happened in the 70s and how 3rd world debt was created. The banks had a lot of cash on hand and started loaning it out at cheap rates.
The major problem with this theory is the Middle Eastern financial sector is now far more developed and the Arabs have started investing more in Asia and their own countries. But a lot of the oil money still makes it back to America.
I heard an interesting theory on this from an economist.
He basicly says at this point in time it's in U.S. interests to have high oil prices.
With the sub prime issues bank lost a lot of their liquidity. Meaning they don't have cash on hand anymore to fund loans buyouts, etc. So these American banks need more cash. With high oil prices lots of cash from the Europe and Asia makes it into Opec countries, the Arab members place a lot of this money in U.S. banks.
This is actually what happened in the 70s and how 3rd world debt was created. The banks had a lot of cash on hand and started loaning it out at cheap rates.
The major problem with this theory is the Middle Eastern financial sector is now far more developed and the Arabs have started investing more in Asia and their own countries. But a lot of the oil money still makes it back to America.
island muslim
Junior Member
wa alaiykum salaam akhi,
good article , very informative jazakallah kahiran
good article , very informative jazakallah kahiran
taxhonesty
Info Warrior
I wondered if people paid attention to the causes of high oil prices none of which included dwindling oil supplies or peak oil.
http://www.guardian.co.uk/business/2008/jun/11/commodities.bp
http://www.guardian.co.uk/business/2008/jun/12/bp.oil
http://www.guardian.co.uk/business/2008/jun/11/commodities.bp
http://www.guardian.co.uk/business/2008/jun/12/bp.oil