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2006-07-25 20:14:21 · 2 answers · asked by beckham2021 1 in Business & Finance Other - Business & Finance

2 answers

That's a good question really, as there are no reasons for it as the most oilfields are not threaten in any way what so ever, but it shows that the private capitalism is corrupted and should be better controlled by a non corrupted administration. Remember that I did NOT say that state capitalism is better, just as an idea yes. The private is better but must be under a stricter control than today.

2006-07-25 20:25:27 · answer #1 · answered by Realname: Robert Siikiniemi 4 · 0 0

Supply and demand. Oil supply is fixed over the short run and is a non-renewable resource besides. Since demand for it is increasing with global economic growth there is steady pressure for the price to increase. Even the possibility that a war will disrupt some of the oil supply will cause prices to increase since as I've said, the amount of it is fixed in the short run.

As for gold (and certain other precious metals/commodities), it is widely perceived to have instrinsic value over cash which can become volatile in a major crisis (much like black market goods such as cigarettes are in demand during war time). They become cash substitutes since there is a propensity for barter economies during war times. Cash has less value as the economy becomes hyper-inflated and money supply sometimes increases (they just keep printing sometimes).

2006-07-25 21:50:20 · answer #2 · answered by puppy 3 · 0 0

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