10-07-2012, 11:33 AM
[quote name='kzem1' timestamp='1349611661' post='133482']
Another reason why gas is the highest it has ever been this time if year is the Fed. Oil is traded in US$ and the fed has spent the last 4 years debasing our currency. As the dollar is bashed to the ground by the FED, to try and juice up the stock market and help Obama get re-elected, oil, gas, food etc. all shoot up. If we figured our inflation numbers the way it was done during the Clinton years it would be 5.2%. IF we figured it the way it was done up until 1980, it would be 9.2%. Just something to think about.
[/quote]
It's very true that as the dollar declines in value, the price of commodities such as oil go up. But there are two things I don't understand about this:
1) While it's true that the dollar has declined in value, so has the other major world currency (the Euro), as well as the Yen. The only major currency I can think of that the dollar has actually lost some value against is the Yuan, and even it is pegged to the dollar, so the dollar can't have lost too much of its value relative to that currency. Given this situation, does the "decline" in value of the dollar really explain the run-up in oil prices since early 2009, or is it just a gradually recovering world economy?
2) Why are the prices of oil and gasoline out of sync, relative to the summer of 2008, when oil hit something like $141/barrel, and gas was around an average of $4.10 (a ratio of 34.3:1), while today, oil is about $92/barrel, and gas is averaging around $3.60 (a ratio of 25.5:1).
I'm no economist, but the whole argument of the impact of the Fed "printing money" has never rung true with me. I don't know about you, but not a dime of the trillions the Fed has supposedly "pumped into the economy" has found its way into my pocket.
Seems to me that the driving force behind gas prices is dominated by events that impact refining capacity: note what happens to pump prices if there is even a hint that a storm may be headed toward the Gulf, and the impact of the refinery fires in California DS describes. I say build the Keystone Pipeline asap, drill for oil wherever we can, and stick to the gas mileage standards. This is the only thing that will keep gas prices down, which will stimulate the economy, and create the tax revenues needed to build the public transportation we so desperately need in this country. Maybe then we can talk about raising the gas tax to encourage people to ride it without tanking the economy.
Another reason why gas is the highest it has ever been this time if year is the Fed. Oil is traded in US$ and the fed has spent the last 4 years debasing our currency. As the dollar is bashed to the ground by the FED, to try and juice up the stock market and help Obama get re-elected, oil, gas, food etc. all shoot up. If we figured our inflation numbers the way it was done during the Clinton years it would be 5.2%. IF we figured it the way it was done up until 1980, it would be 9.2%. Just something to think about.
[/quote]
It's very true that as the dollar declines in value, the price of commodities such as oil go up. But there are two things I don't understand about this:
1) While it's true that the dollar has declined in value, so has the other major world currency (the Euro), as well as the Yen. The only major currency I can think of that the dollar has actually lost some value against is the Yuan, and even it is pegged to the dollar, so the dollar can't have lost too much of its value relative to that currency. Given this situation, does the "decline" in value of the dollar really explain the run-up in oil prices since early 2009, or is it just a gradually recovering world economy?
2) Why are the prices of oil and gasoline out of sync, relative to the summer of 2008, when oil hit something like $141/barrel, and gas was around an average of $4.10 (a ratio of 34.3:1), while today, oil is about $92/barrel, and gas is averaging around $3.60 (a ratio of 25.5:1).
I'm no economist, but the whole argument of the impact of the Fed "printing money" has never rung true with me. I don't know about you, but not a dime of the trillions the Fed has supposedly "pumped into the economy" has found its way into my pocket.
Seems to me that the driving force behind gas prices is dominated by events that impact refining capacity: note what happens to pump prices if there is even a hint that a storm may be headed toward the Gulf, and the impact of the refinery fires in California DS describes. I say build the Keystone Pipeline asap, drill for oil wherever we can, and stick to the gas mileage standards. This is the only thing that will keep gas prices down, which will stimulate the economy, and create the tax revenues needed to build the public transportation we so desperately need in this country. Maybe then we can talk about raising the gas tax to encourage people to ride it without tanking the economy.
