G7 meeting issues another oil caution

``Bullish'' ministers nonetheless still worried about oil

The money managers from the world's wealthiest country met this weekend in Washington where they discussed their usual agenda of how best to extend extreme neoliberal policies -- for example, opening the Chinese currency to speculation under the guise of correcting ``imbalance'', denying struggling people in poor countries debt relief through endless ``case-by-case analysis of HIPC [Heavily Indebted Poor Countries] countries'', and keeping these same countries and their people wide open for foreign exploitation and easy repatriation of profits -- while destroying unions and our local manufacturing jobs in the process.

But this time they had to sooth nervous capitalists with a salve of faux bullishness in order to explain away the recent slide on Wall Street -- often a leading sign of deepening economic hard times.

For example, US Treasury Secretary John Snow was quoted in this AP story:

The upbeat joint statement by finance ministers and central bank governors from the Group of Seven major industrialized nations broke little new ground, but their meeting provided an opportune moment to issue soothing words about the outlook. Coincidentally, the meeting came after several days of turmoil in financial markets that culminated Friday in Wall Street's worst single-session loss in nearly two years.

``I don't comment on stock market moves. What I do comment on is underlying fundamentals, and the underlying fundamentals remain strong,'' U.S. Treasury Secretary John Snow said at a news conference following the meeting with his counterparts from Japan, Britain, Germany, France, Italy and Canada.

But the ministers clearly remain rattled by high oil prices. (Please see extensive Deep Blade post on this subject from October 2004.) The terse language on oil issued in the communique reads,

Higher oil prices are a headwind, and the expansion is less balanced than before.

We welcome efforts to improve oil market data, increase medium-term energy supply and efficiency.

Supply, supply, supply. The belief that the world oil industry will drill its way to perpetual economic growth is part of the subtext here, as is some degree of worry that this just is not so -- and that peak oil is real.