I think we are back to the point where a significant price spike in Oil could happen at any time.
Yea, China is "tightening"... B.S. China is P.O.ed and bluffing/negotiating. The Federal Reserve is going to use every dime they have threatened to... or lose all credibility forever (actually, that might have already happened... and nothing is impossible... but I would not count on the Fed backing down now). The world ex-U.S. is increasing its demand for petroleum products... and the supply is simply not there. Consumption within the exporters continues to grow briskly, as it is in Asia and Latin America... could a Europe blow-up throw oil demand off a great deal? Maybe, but not for long (and probably not).
Ergo, demand will brought into equilibrium via price (spike)... and given prices are already in the low 80's.. . and given the fact that the U.S. unemployment picture is not likely to get much, much worse... and, bad as it is the U.S. is still consuming Oil like it was cheap...
All of the above I interpret as indicating much higher Oil prices sometime in the next 24 months is highly, or very highly, probable.
This is not a market call... In the short term markets exist to make us look dumb... but I am getting long here in the commodity and lightening up on the energy equities...
OK, so that's what I am doing trading wise (if I am wrong, I am gone)... IF (emphasis on "IF") it turns out I am correct and sometime before election-time-2012 there is another move in Oil, say, to a high of $120 to $180 (I didn't say oil was going to stay high... I said it could spike higher until demand gets chocked to near death...) there will be no place for the U.S. Federal Government to hide. The IEA is out... the EIA, at the direction of the Feds, is going to come out, too.
The U.S. will be forced to come clean on "Peak Oil Imports" or "Peak Oil" or "the End of Cheap Oil" or whatever label they are going to use.... the point is, in finally acknowledging it for what it is, the Government's acknowledgment that the Age of Oil is drawing to its close will have a profound impact on markets, politics, economics, population, immigration.... just to name a few. A Profound Impact.
All of those hoping for the Government to "Do Something" are going to get there wish... As always, careful what you ask for - you just might get it.
This time, if I am right about a surge in prices, you might just get it.
So what policies might the Federal Government enact? What can they really do? Not very much... and a great deal. Over the long term, not very much... in 20 (more likely less than 10) years the Oil age will be all but over if it is measured against our lifestyles now (inflationary or deflationary? Who cares? I am going to spend any money I have left over after my Oil and farmland investments on one h*ll of a good time). In the short term? All manner of huffing and puffing, sucking and blowing, spitting and stammering... is in the cards, I'm afraid. The propaganda effort launched by various special interest groups in an effort to leave somebody else holding "the bag" will be mind-boggling, and it will absolutely, positively begin in earnest immediately following the next Oil price spike.