Think Freely Media presents Common Sense with Paul Jacob

Petroleum-based fuels are going up in price, so naturally people start looking for someone to blame. Call up the Usual Suspects:

  1. Speculators. These futures market folks never get credit for lowering the prices of gas, but they can always be counted on to serve as easy “bad guy” targets when prices go up. Same this time. You’ve heard the rumors, the rancor. (It’s nuts.)
  2. President Obama. You know, for not allowing drilling and pipelines and such. Go to a meeting of conservatives and you’ll hear someone yell out “Drill, baby, drill!” Now, I’m all for drilling, and it’s stupid to clamp down on future supplies of oil — indeed, investors in the futures market for oil see these political and bureaucratic restrictions on exploration and mining and refining, etc., and no doubt bid up the price of oil — but really, don’t blame just Obama, blame, also,
  3. Romney and Santorum and Gingrich. All these presidential candidates have engaged in hysterical, belligerent rhetoric about Iran, threatening warfare in the Persian Gulf region. War is bad for supply lines. Compromising supply lines means compromised supplies. Which means less oil. Which means rising prices.

So of course futures traders will bid up those prices — they would lose money if they didn’t — and in so doing they make the likely future conditions palpable to contemporary decision makers.

That’s their economic function. Don’t blame the messenger.

So, if you think the U.S. should bomb Iran to prevent that country from bombing the U.S. in a few years (after which the U.S. could easily make the populous nation, full of innocents, a sea of irradiated glass), don’t gripe.

One consequence will be (must be) rising prices.

This is Common Sense. I’m Paul Jacob.

 

By: Redactor

8 Comments

  1. Robert says:

    Let us not forget Ben Bernecke’s money machine, which has been manufacturing trillions of Federal Reserve “dollars” out of thin air to bailout Wall Street and central banks around the world, particularly in Europe. Now China seems to have stopped buying up our debt and is starting to unload the dollars in their reserves, which means old Ben is creating still more of his funny money to cover the out of control spending in Washington.

    Debase the currency and prices are going to go up.

  2. Sheldon says:

    It is my understanding that the price of petroleum is not rising, but, on the contrary, the value of our currency is falling. Oil priced in silver (real money) has actually fallen.

  3. …. This is Common Sense. I’m Paul Jacob ….

    Usually that’s the case – to the extent I cannot recall when I did not find it so. And I am absolutely sure you are, indeed, Paul Jacob.

    But your suggestion the current Gangster’s Government’s “administration’s” destructive policies have not destructively impacted on the “price” of oil products is as far fetched as is the implication is nonsensical that America should contemplate the possibility of a nuclear attack and/or that we would survive such.

    And then, as Robert has suggested there is the Gangster’s Government’s criminal Fed’s more insidiously effected every-bit-as-criminal counterfeiting (AKA “feral gummint debt monetizing”) that has seen to the “creation of the several Trillions of cut-from-the-whole-cloth fiat “dollars” that have chased up the “price” of gold.

    One ounce of which still buys the same 16-20 barrels of oil it bought (at about $2.75 per barrel) forty years ago!

    All absolutely linked to the “administration’s” policies’ causation and not, for once, merely correlation!

    B)

  4. Drik says:

    Presbo said he is “going to keep doing everything I can to help you save money on gas, both right now and in the future.”

    The problem is that nearly every policy that might be initiated by a President has effects that are felt further down the road (watch out for that can).

    Vitually every oil well that is producing oil right now is a well that was leased and permited prior to 2008. It takes 5-6 years for a permitted well to actually become built and producing oil for the market. That’s not the problem, although the results of Presbo’s policies can certainly drive up prices temporarily as speculators, like his friend George Soros, can jump in and run up the costs playing with futures commodities contracts.

    What is driving the price of oil and the cost of a gallon of gas right now is the result of a devalued dollar. The numbers of dollars in circulation spiked tremendously. Twice. Under the leadership of Ben Bernanke, who controls the private company, the Federal Reserve, and who serves at the whim and wishes of Presbo.

    Little items called by the unassuming name of QE1 and QE2 (Quantitative Easing 1 and 2) involved pushing huge numbers of newly printed dollars into circulation and thereby diluting the purchasing power of the dollar. This eased the cost of paying back creditors of the govenrment, which meant that our government’s credit rating took a hit but not nearly as bad as it could have been. It also meant that our dollars would purchase less. This is the single greatest and nearly the only effect on the cost of gasoline that has been had by this administration.

    How much effect? For those with poor memories: it took $1.83 to purchase a gallon of gas on January 2009. Yesterday, the price of regular close to my house was $3.65, essentially double the price. Most of that doubling of cost came from the lost purchasing power of the dollar. NOT from speculators. Since the cost of energy and food are not counted under the way the government has decided to figure inflation, they happily report that there is little inflation. Of course the politicians get to write off most of their gas costs.

    So if he was REALLY going to be doing EVERYTHING he could, he’d be raking Bernanke over the coals and making him take those dollars back out of circulation. Except he can’t. Because then it would be even harder to justify continuing the massive spending and our country’s credit rating would be in the toilet, instead of merely hovering over it. So maybe “can’t” isn’t the right word. What about “disinclined”?

    Of note, with the current technical ability and known reserves, we have an over 800 year supply of natural gas and at a market cost of 1/4 that of the enrgy cost of oil. Which would pretty well gut the efforts of Presbo to switch us over to crushmobiles and to “skyrocket” the cost of energy.

  5. Drifter says:

    Sorry I can’t agree,Paul. Somehow, I can’t hold the Repub candidates to the same standard as the Misdoer in Chief. They are not in elected power. I don’t think that any one of them has the desire to see the American economy fail. Obama does have this desire though, and he has proved that he’s willing to finance that goal with taxpayers money

  6. Brian Wright says:

    Gingrich actually has a 30-minute video out (https://www.newt.org/donate/energyaddress/?utm_source=SmartCommunicator&utm_medium=email&utm_campaign=30MinuteSpeech) describing how to make America energy self-sufficient. He points to the Bakken Formation in North Dakota and other shale technology and natural gas technology. Assuming property rights are respected–a big assumption when dealing with economic fascism–our energy issues may not be glum.

    But that still doesn’t keep the Newt from wanting to Bomb Bomb Iran. Scary stuff these other ‘major’ candidates besides Ron Paul.

  7. MoreFreedom says:

    How did Jacob miss the Fed’s contribution (thanks to Obama and Congress’ profligate spending) to a declining dollar and rising oil prices? At least the posters know. And I believe we can thank Ron Paul for educating us about the Fed.

    Some are saying our politicians are banging the Iranian war drums to prevent oil from being traded in something other than dollars, which would cause an international exodus (to some extent) of the dollar as the world’s reserve fiat currency. Thus leading to inflation and the potential collapse of the dollar and our government. After all, our intelligence and defense agencies have said they’ve no evidence of Iran even deciding it wants a nuclear weapon. I for one, believe they do not, because if they use one, they know they are signing their death warrants.

  8. […] (typeof(addthis_share) == "undefined"){ addthis_share = [];}Earlier this week I touched on gasoline prices. One factor I didn’t mention (but which is getting a lot of coverage, now) is the weakening […]

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