GAS Prices Are NOT Rising; DOLLAR is FALLING!
Discussions on this site are very interesting and it may be helpful to understand the nature of the "Dollar"; cause of the falling dollar and rising prices is printing money out of thin air (nothing to back it). So, not only are gas prices rising, so is everything else, at the same rate, and for the same reason. Please read this explanation from Forbes Magazine. Another issue to consider is that the Eastern oil rich countries are no longer using the U.S. Dollar, Iran being the latest. Hillary Clinton said 'we can't go to war with all of them". Iraq proposed the Oil Bourse first, we went to war, now Iran and Syria have followed. They NO LONGER WANT our 'valueless paper dollars'!
In light of ALL this, please review the monetary policies of ALL our Presidential candidates and the ONLY one talking about monetary policies, the printing of money, the bureaucracy and unending expansion of the government, endless invasions (wars), eliminating the Federal Reserve (who is NOT a part of the Federal Govt, but a private international bank) and Federal Reserve PRINTS THE MONEY!
That person in Congressman Ron Paul, whom the media ignores and maligns, gets the largest crowds, more donations from our Military than ALL the other candidates combined (including Obama), gives specifics on cutting the deficit by $1 Trillion dollars the first year, will downsize the govt., eliminate the Federal Reserve, promote private enterprise, and supports freedom and prosperity for all, NOT the elites and corporatists and international banksters!
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Gasoline Prices Are Not Rising, the Dollar Is Falling
http://www.forbes.com/sites/louiswoodhill/2012/02/22/gasoline-price...
Panic is in the air as gasoline prices move above $4.00 per gallon. Politicians and pundits are rounding up the usual suspects, looking for someone or something to blame for this latest outrage to middle class family budgets. In a rare display of bipartisanship, President Obama and Speaker of the House John Boehner are both wringing their hands over the prospect of seeing their newly extended Social Security tax cut gobbled up by rising gasoline costs.
Unfortunately, the talking heads that are trying to explain the reasons for high oil prices are missing one tiny detail. Oil prices aren’t high right now. In fact, they are unusually low. Gasoline prices would have to rise by another $0.65 to $0.75 per gallon from where they are now just to be “normal”. And, because gasoline prices are low right now, it is very likely that they are going to go up more—perhaps a lot more.
What the politicians, analysts, and pundits are missing is that prices are ratios. Gasoline prices reflect crude oil prices, so let’s use West Texas Intermediate (WTI) crude oil to illustrate this crucial point.
As this is written, West Texas Intermediate crude oil (WTI) is trading at $105.88/bbl. All this means is that the market value of a barrel of WTI is 105.88 times the market value of “the dollar”. It is also true that WTI is trading at €79.95/bbl, ¥8,439.69/barrel, and £67.13/bbl. In all of these cases, the market value of WTI is the same. What is different in each case is the value of the monetary unit (euros, yen, and British pounds, respectively) being used to calculate the ratio that expresses the price.
In terms of judging whether the price of WTI is high or low, here is the price that truly matters: 0.0602 ounces of gold per barrel (which can be written as Au0.0602/bbl). What this number means is that, right now, a barrel of WTI has the same market value as 0.0602 ounces of gold.
During the 493 months since January 1, 1971, the price of WTI has averaged Au0.0732/bbl. It has been higher than that during 225 of those months and lower than that during 268 of those months. Plotted as a graph, the line representing the price of a barrel of oil in terms of gold has crossed the horizontal line representing the long-term average price (Au0.0732/bbl) 29 times.
At Au0.0602/bbl, today’s WTI price is only 82% of its average over the past 41+ years. Assuming that gold prices remained at today’s $1,759.30/oz, WTI prices would have to rise by about 22%, to $128.86/bbl, in order to reach their long-term average in terms of gold. As mentioned earlier, such an increase would drive up retail gasoline prices by somewhere between $0.65 and $0.75 per gallon.
At this point, we can be certain that, unless gold prices come down, gasoline prices are going to go up—by a lot. And, because the dollar is currently a floating, undefined, fiat currency, there is no inherent limit to how far the price of gold in dollars can rise, and therefore no ultimate ceiling on gasoline prices.
Federal Reserve Chairman Ben Bernanke uses a “core CPI index” that excludes food and energy to guide monetary policy. From Big Ben’s point of view, rising gasoline prices are not a problem. For the rest of us, they are becoming a big problem.
Over the centuries, gold has been “the golden constant”. Eventually, all prices equilibrate with gold. This is why gold represents the best available standard in terms of which to define the value of a monetary unit. Forty-one years ago, when the value of the dollar was defined in terms of gold at $35/oz, WTI was selling for $3.56/bbl.
Right now, the threat posed by rising gasoline prices is not just to family budgets. An even greater danger is that the government will use escalating oil prices as an excuse to do something stupid.
After President Nixon abrogated the Bretton Woods monetary arrangement in stages starting in September 1971, both gold prices and oil prices started to rise. The government responded by imposing wage-price controls. This made a bad situation much worse.
This time around, the stupid policies being considered to “deal with” rising gasoline prices include additional cuts in payroll taxes and higher taxes on energy producers.
During the 1970s, the toxic combination of a weak dollar, high tax rates, and onerous regulations introduced a new word into America’s economic vocabulary: stagflation. Reaganomics banished this word to the history books. Now, President Obama and Fed Chairman Bernanke are teaming up to give stagflation another try. It is not likely that Americans will like it any more this time around than they did 40 years ago
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Replies to This Discussion
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Permalink Reply by Dan on -
8 - 1964 Ben Franklin half dollars melted today = roughly one Ben Franklin note. This puts inflation much higher than the past when things doubled in price about every 10 years. 3% is BS.
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Permalink Reply by Linda A on
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Thanks Jasper & Dan - this is a very important conversation to have as many just talk about 'high price of gas' when it's the high price of everything ONLY due to devaluation of the paper dollar.
These are only symptoms of the problem and if we don't eliminate the problem, doesn't matter about availability of gas and oil - drilling or the related businesses.
It's the biggest tangible symptom of the problem because everyone uses gas. Today, we have two or three vehicles per household, gas lawn mowers, boats, motorcycles, sports car, weed eater, snow blowers, and on and on which all use gas.
While getting a handle on gas and drilling, it will NEVER solve the problem created by the Federal Reserve, who just push a button and create more money.
Ron Paul us the ONLY presidential candidate who even talks about this and the other REAL issues.
"THE SMART WAY TO KEEP PEOPLE PASSIVE AND OBEDIENT IS TO STRICTLY LIMIT THE SPECTRUM OF ACCEPTABLE OPINION, BUT ALLOW VERY LIVELY DEBATE WITHIN THAT SPECTRUM."
Norm Chomsky
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thanks Jeff - gotta 3VOL ya!
Thanks Mark - there are many books denoting what is happening and people like Jeff CHOOSE to ignore them.
Jeff, How about Ron Paul's book, "END THE FED", are you game to read and comprehend this book from a man who has been in the know for 30 years?
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well, that's a good start -
but, common Jeff, learn something different than what you CHOOSE to believe? Would give you a perspective of which you've not considered yet...
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Permalink Reply by mbc on
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Chomsky? Chumpsky! Clearly, he is someone who if society was as he wished it was - he'd be complaining about it! I can hear it now - That's not fair! Don't fight over that, fight over this! I worked for that! That guy's lazy! Gimme that back! Waaah, waaa, waaa!
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Permalink Reply by 2s72s0k9mm8gd on
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Linda, For a couple generations now Academia has been doing a thorough job of churning out crop after crop of Brainwashed , Marxist Eggheads. We have a few in our midst here on GMS , as you can see. Is it any wonder the nation is on the brink of collapse......Look at what's at the helm!!!
Isn't it totally ironic that these supposedly Highly Educated Elitists are so lacking in common sense and integrity? They are so arrogant that THEY look DOWN upon US.......LAUGHABLE......and sad. I almost pity them. Useful idiots , all.
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thanks glen
@Jeff, since picking on you, some maintain advanced degrees and high IQ's don't necessarily go hand in hand. Formal schooling and degrees are highly over rated and over priced unless you require a license to practice a particular career, ie physicians (and medically related careers), lawyers etc etc.
And certainly NOT necessary for the intelligent or to be successful or prosperous. Just a piece of paper to bring out of the mothballs when feeling inferior. Your term 'uneducated' is offensive to those who never let their schooling get in the way of their education.
The Chomsky quote fit the subject at hand as it is evident in today's discussions, political and otherwise.
School teachers and college profs are generally socialists because that is the methodology of how they were 'schooled'.
Book for a history class on Thomas Jefferson at SRU, had NO mention of a Constitutional Republic in the book is just one small example.
ALL our leaders, except for 'you know who' talk about the U.S. as a Democracy - in THEIR dreams! Chomsky would love this!
Modern transcriptions of the Bible are replacing the King James Version, and the words are changed to accommodate the current trend 'to make it easier comprehension' *cough...
This may or may not be of interest... here's a link to an on-line version of Noah Webster's 1828 dictionary.
This in my opinion is a "must have" when wanting to look up anything written a couple hundred years ago and before. This includes the Constitution, Federalist Papers, the Founding Fathers, Adam Smith, Ralph Waldo Emerson, etc.
http://www.1828.mshaffer.com/
Some ordinary words really have changed a lot, even more have shades of meaning lost. The meanings of sentences, in terms of concepts, are not objectively discoverable. Since there is no objectively definable relationship between the form of any sentence and what it means, a scientific approach to grammar, in the style of Chomsky, is a hopeless case. Sentences do not contain their meanings, but only express them. -
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Now, THIS is just common sense and just one more thing, Jeff, did you do an analysis on our republican presidential candidates by way of IQ, education, experience, voting record to support current rhetoric and/or past positions? If you did, it would be a great public service to publish your analysis here. I must, however, assume you lacked research since you support Romney - whoops, I should never assume your principles are the same as mine or that they support The Constitution...
Romney, Santorum, and Gingrich must CONSTANTLY explain today's positions compared to past positions AND voting records. Politicians...
Ron Paul's words today are consistent with his voting record and ALL past positions - ALL the same - legislation weighed against his oath of office to support and defend the constitution - EVERY vote has that requirement!
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must disagree again, @Jeff...
Did you ever read 'Millionaire Dropouts" or "Lies My Teacher Taught Me"?
So now it begs the question, what are your degrees in? Do you work or are you employed in that industry? THAT would be the justification for your degree... in my opinion...
A friend of mine has several master degrees but continues to work during retirement years because he needs the income. and the cost of a doctorate today is unreal!
MD's such as PCP's and SCP's and the likes barely make enough money to live, run their business, and pay off educational loans, let alone try to live an 'expected' lifestyle! Plus, they now must be Board Certified to be credentialed by most HMO's, and re-certified after a number of years - yes, CE is required for all medical practitioners.
Formal schooling for degrees which require a license, yes; otherwise, you can go to a free library and learn anything about any subject, and now, of course, we can research on the net.
Two problems here, anyone can write a book and anyone can post anything on the net...
A classmate of mine, who is a billionaire, whose twin sons actually 'invented' the concept for Facebook (at Harvard), invited a more savvy computer friend to assist with some kinks in the program, and the rest is history.
We were raised, trained and taught using many myths, not only about education, but about finances. Another great book, "Killing Sacred Cows"; Overcome the Myths that are destroying prosperity...
http://www.killingsacredcows.com/
A couple more books, "Rich Dad/Poor Dad" actually proves my point, and I also love, Napoleon Hill's "Think and Grow Rich". Have those on CD because of extensive travel in my profession.
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@Jeff, come back to my post above because I added a couple more books, which PROVE my point...
WHEN you factor in the cost of the 'formal schooling', it is a wash... well, unless you had wealthy parents who paid for your schooling...
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Assumptions... There is NO guarantee of ROI! even IF you have a career in your formal schooling. Data easily manipulated, but see MANY college grads working at GM, at grocery stores, at you name it because no jobs in their industry yet still must repay college loans.
Also, the cost of a degree would be greatly reduced if the govt. didn't supply funding... When the fed govt is involved, prices go up, just like $600 toilet seats!
A degree is NO guarantee of a job, but it is a guarantee of repaying college loans... And now, the federal govt has oversight of all college loans..
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Permalink Reply by craig on
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First off, a fair percentage of those attending college shouldn't even be there in the first place. Secondly, college equates to partying for way to many students and not schooling. When I hear our gov't leaders say that everyone should go to college, I just shake my head in disbelief and ponder where our country is headed.
Work hard and do above average in college, and you will get a good job.
College is like everything else in life..... you get out of it what you put into it.
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