We haven’t seen inflation on the whole during the financial rescue efforts, despite the Federal Reserve’s easy money policies. If you wanted to cherry pick certain assets, the argument could be made that $140/barrel oil, during a recession, coinciding with a dump of liquidity on the economy, could be related. Global oil transactions are denominated in US dollars. It is hard to imagine any other factor being solely responsible for such a historic, and counterintuitive, rise in petroleum during a recession.

Economic forecasts are a funny thing. If they attempt to project anything beyond the short-run (one year), be very skeptical. But short-run forecasts are not iron-clad either. I have a great time on this site making fun of economists and their predictions. Guessing what the intricate convergence of millions, if not billions, of different economic agents and their decisions will be, is kind of an exercise in futility. So if I were to predict what crude oil will do in 2010, I’d give you some markers to help you make your own decision long before I took a specific barrel price and defended the position.

Why can multi-national big business provide such value (not only lower prices, but improved availability of products, convenience, and, at times, quality)? In large part, it is a phenomenon called economies of scale. The larger a firm’s production volume is, the less input costs allocated to each individual unit. The local food model does not transport its food on semi’s or jetliners. Already, you have less space to store transported food. Put another way, each individual food item bears a greater cost of the fuel. Imagine a 1974 Chevy truck bed compared to a semi stuffed to the rafters. Now imagine organic strawberries in each. Which supply chain model do you think will deliver the lowest carbon emission per strawberry? Not to mention cost per unit. Here is a study debunking the food mile myth, with Kenyan green beans transported to the United Kingdom.

Steven Levitt and Stephen Dubner, authors of Superfreakonomics, discuss cheap solutions to global warming thatdon’t involve Cap and Trade. Ahh, a sensible solution, how blasphemous!

I’m about to tell you why non-ideological economists get so frustrated with global warming zealots (brace yourself): frankly, there are more pressing issues facing the world. I know, in the wake of NBC’s “Green Week” and Prius’ taking over the streets, it’s hard to believe. This isn’t to say that environmental preservation is not on the short list of world concerns. It is. And this isn’t to say that environmentalism is not a worthy cause. Again, it is. Unfortunately, some of the brightest minds in the world, who look at things from a perspective of costs and benefits, do not see the need for public tax dollars to be funneled vigorously into combating climate change. Just ask the Copenhagen Consensus.

The carbon trading scheme that passed the House and is making its way to the Senate is a new derivatives market set up at the behest of Goldman Sachs and other major Wall Street financial firms. Out of curiosity, how did the last financial derivatives market turn out? And yes, it is also a regressive tax, (Who do you think is hurt most by higher energy bills?).

Back in the Middle Ages, the Catholic Church and some other unaffiliated snake oil salesmen, sold what were called indulgences. These indulgences offered penance for a variety of sins and could either commute or completely eliminate one’s arduous trip through Purgatory. Today, we have a similar situation; we have an entire market of carbon credit traders. Basically, you buy offsetting carbon credits (for someone, probably in a third world country, to plant trees or something like that) to make up for your “carbon footprint.”

The Group of 20 (G20) met in Scotland over the weekend, bringing together central bankers and financiers of nineteen countries, and the European Union (EU). The collection of nations constitute 80% of world trade and two-thirds of the world’s population. (1) Discussions of “re-balancing” the world economy have taken place over the last few months by members of the G20; those sentiments continued this weekend in St. Andrews, but apparently only in general terms. (2)

Gold bullion futures touched a record high $1,045 in yesterday’s trading session in New York. If you believe in stock indexes breaking through resistance points, this may be just that for bullion.

Financial genius and democratic supporter Warren Buffett, describes the Cap and Trade bill headed for the senate as a “regressive tax.” That it is: