By Charles Kadlec
The stage has been set for a surge in the price of oil to more than $100 a barrel. The culprit is not the Organization of Petroleum Exporting Countries, nor China and the developing world’s growing demand for energy–though they will surely be blamed.
By Mark Shenk and Grant Smith
Oil prices have hovered around $78 a barrel most of the year, providing little excitement as other commodities, including copper, gold, and cotton, have enjoyed record runups. Global economic growth has not been brisk enough to drive up oil demand substantially, U.S. inventories have been ample, and the Saudis have been pumping enough to guarantee a plentiful supply.
It would be hard to find two more unlikely intellectual comrades than Robert Zoellick, the World Bank technocrat, and Sarah Palin, the populist conservative politician. But in separate interventions yesterday, the pair roiled the global monetary debate in complementary and timely fashion.
The former Alaskan Governor showed sound political and economic instincts by inveighing forcefully against the Federal Reserve’s latest round of quantitative easing. According to the prepared text of remarks that she released to National Review online, Mrs. Palin also exhibited a more sophisticated knowledge of monetary policy than any major Republican this side of Wisconsin Representative Paul Ryan.
Stressing the risks of Fed “pump priming,” Mrs. Palin zeroed in on the connection between a “weak dollar—a direct result of the Fed’s decision to dump more dollars onto the market”—and rising oil and food prices. She also noted the rising world alarm about the Fed’s actions, which by now includes blunt comments by Germany, Brazil, China and most of Asia, among many others.
“We don’t want temporary, artificial economic growth brought at the expense of permanently higher inflation which will erode the value of our incomes and our savings,” the former GOP Vice Presidential nominee said. “We want a stable dollar combined with real economic reform. It’s the only way we can get our economy back on the right track.”
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