Thursday, September 14, 2006
I think this blogger is correct when he says that oil prices might proxy for Katrina and Iraq. But that means, if true, the gas prices we observer are being moved mostly by risk premia for world events. If those were to subside, how low could gas go? $1.15? Could be, if it turns out the oil price was a bubble caused by destablizing speculation. Tell you what, though: If the price of gas was halved to $1.15, Bush's popularity would not double.