It is going up because QE2 is destroying the value of the US dollar, which is why “speculators” are trying to find something other than the dollar (such as oil) as a unit of value. It is not a supply and demand problem which was the problem a few years ago.
The Fed is deliberately trying to cause inflation, which sends commodities such an food and energy up.
QE2 is being used to fund deficit spending by government. It destroys the dollar and is a back handed tax through inflation. You pay the tax by more expensive food and gas.
It is also why interest rates will go up, as they are at the moment.
Your post states the cause and effect of rising oil correctly. It’s also having a similar effect on the stock market.
The “look over here” misdirection aimed at the eeeevil speculators is just a diversion. However, the dirty little secret is that bond rates are going UP, the opposite effect of what Bernanke says he intends.
There will come a day, fairly soon, when rising rates and the moonshot in commodities will have a nightmare effect on things. No, Bernanke isn’t printing money and didn’t print money and Clinton didn’t have sex with that woman. True statement; he’s clicking on his mouse and emitting unbacked credit however, the effect being precisely the same thing.
Exactly right. Supply and demand. If there are more dollars in the marketplace, they will be worth less in terms of real goods.