Tim Clark, CEO of Emirates, has made a variety of statements regarding the airline industry and the world as a whole to Gulf Business. 

Clark sees another steep escalation of oil prices as being disastrous for the airline industry as a whole (I agree) and even for the world.  He blames world speculation in oil as being the source of the problem and calls it greed.

I think speculation in oil has raised the prices significantly.  What’s worse, that rise in cost is not well reflected in inflation values for both the United States as well as other nations.  Inflation calculations don’t consider the rise in the cost of fuel for our cars.

But I’m not sure that I blame speculators entirely either.  The truth is that we’ve had sustained financial crisis of one kind or another since 2008.  The US Dollar has devalued considerably as has the Euro as well.  Oil is a dollar denominated commodity presently.  There has been some desire to sell oil in Euros as well but that wouldn’t fix the problem one iota.  The Euro is, if anything, less “sure” than the dollar whatever its present value.

The key to lower oil prices is fiscal and monetary policies that are consistent, stable and sustainable over the long term in the United States and other western nations.   The markets are attracted to oil because it is a hedge against inflation presently.  We think there is little to no inflation at work presently and that’s just not the case.  In fact, we have quite a bit of inflation presently which isn’t accounted for.

It’s not so much greed on the part of speculators or oil companies as it is a result of sustained economic crisis.  When we handle our crisis and have plans in place that are sustainable for the long term, things will improve.

Lest any reader think I’m advocating a political party here, I’m not.  The truth is that I believe that our crisis is a result of both sides of the aisle attempting to have it all their way.  I think our solutions are to be found in the exercise of compromise and I think both sides have done us a great disservice in fighting this out in public.  The truth is that if I blame anyone, I blame Congress and, in particular, the House of Representatives for acting like a pack of middle school aged teenagers.  I see similar behaviors in Europe and elsewhere.

We deserve exactly who we vote for and apparently we deserve obstinate ideologists who would rather shoot both feet off to save face with their electors.

Filed under: Trivia by ajax