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The Truth About Oil Prices and Why They’re Going Up, Up, Up

Every day we hear the newspapers and TV and Radio people screaming about the high prices of oil and gas. They argue about what is driving higher prices. They wonder where it will go next.

Why is everyone so upset? We pay as much as $2 per 8-oz of bottled water. How much is that per gallon of water? There are 138 ounces per gallon. That would make bottled water purchased in 8-oz containers at retail as much as $32 per gallon. So, why the fuss over gasoline prices? We should be worried about the price of water. I used to buy chewing gum for $.05/pack. Now it’s $1.50/pack at the gas station up the road. we should be worried about the price of chewing gum. Have we forgotten how to be productive in our gum making process? No. We are experiencing price inflation, the result of currency inflation.

The truth is, oil prices will go MUCH, MUCH, MUCH higher, but not just for the reasons stated by the media. The day will come when you’ll remember $5 per gallon with fondness. I’m in my late 50’s and remember gasoline at $.20 to $.25 per gallon. Of course, that was back when we were spending silver dimes, quarters, and silver certificates (pre-1965 dimes and quarters)to buy gasoline. Today a silver dime (so called “junk silver”) is worth about $3.50 in Federal Reserve notes. So, actually, today I can buy a gallon of gasoline for less than $.20 face value “junk silver”. Gasoline is actually a better deal today than it was back then when we view it in the context of pre-1965 U.S. coins. The point is, commodities, including oil, are becoming more expensive relative to the Federal Reserve Note because the Federal Reserve prints so many of them. Excessive production of notes debases the value of the notes. One day we may all be trillionaires, but it may not mean much if a gallon of gas costs $1 million.(see: http://en.wikipedia.org/wiki/Hyperinflation). You can see why I recommend people invest in precious metals rather than in the dollar. All my life I’ve watched prices of everything jump higher and higher because of inflation. It won’t stop now.

How do I know oil and gasoline will go much, much higher? Because the Federal Reserve is printing trillions of Federal Reserve Notes. This gargantuan production of Federal Reserve Notes will drive their value down, down, down relative to oil, gold, silver, cotton, sugar, cocoa, etc. The dollar will continue to fall against commodities. The reason Middle Easterners and others want more dollars for their oil is because the dollar is rapidly losing value. The dollar has lost 28% of its purchasing value just since 2008. The dollar is not a reliable store of value. (consider this related story: https://www.area-info.net/articles/edit_article_form.php?article_id=867)

Of course, demand for oil is growing in the “BRIC” countries, Brazil, Russia, India and China. That is another reason the price will continue to increase. However, if our governments would get out of the way of energy companies, plenty of energy is available.

As America embargoes Iran it may also drive up the price of oil. China gets 28% of its oil from Iran. If we make it impossible for Iran to trade, China will have to go elsewhere for its oil. That’s also a great way for us to force Iran into a war footing and start a new world war. China has already warned that if we attack Iran they may declare war on us (don’t believe this? See: http://originaldialogue.blogspot.com/2011/12/china-warns-us-of-wwiii-over-iran-video.html). Russia has threatened the same. That would also disrupt oil supply from the Middle East further and drive up prices. I don’t know why we want to poke a stick in China’s eye and also in the eye of Russia and Iran. Why provoke a war? We did this with Japan when we cut them off from supplies of raw materials and made trade difficult. That’s what caused them to attack Pearl Harbor. We’re making all the wrong moves politically, and economically in our ongoing support of U.N. Resolutions in the Middle East.

Another huge reason that we’ll see the price of oil increase over time is because the U.S. government and the radical environmentalists are doing all they can to make U.S. energy resources unavailable to U.S. energy companies (ie: Anwar, Escalante Grand Staircase, Gulf of Mexico, etc.). Billions of barrels of oil are available in Western states, but the U.S. government has taken over the land and cancelled the oil leases, and sequestered the coal (see: http://en.wikipedia.org/wiki/Grand_Staircase-Escalante_National_Monument) in National Monuments, etc. Socialist factions of the U.S. government have worked hard for years to destroy our coal, oil, and nuclear power companies. The EPA and the DOE have not helped the United States become energy independent, they have helped the United States become ever more energy dependent.

The environmental lackeys of the global socialist movement use their global warming scam to justify government meddling in the energy business. When temperatures dropped the environmental extremists changed from “global warming” to “climate change” so whether it gets colder or hotter they can blame it on oil. I highly recommend the book Climategate by veteran Meteorologist Brian Sussman if you want to understand more deeply what I’m talking about here (here it is on Amazon: http://www.amazon.com/Climategate-Veteran-Meteorologist-Exposes-Warming/dp/1935071831/ref=sr_1_1?s=books&ie=UTF8&qid=1330126723&sr=1-1) Also I strongly recommend this brief article: https://www.area-info.net/articles/show.php?cty=&st=&article_id=958&t=Acceptance_Of_The_Unsubstantiated_Global_Warming_Theory_Could_Harm_Our_Economy.).

There is strong evidence that by the middle of this century we will be entering a small ice age. We need not panic about global warming. We’ve had major ice ages four times before. They were always followed by global warming. All of these ice ages and warming were caused by the sun, not by anything man did. To read about the most recent prediction of a solar caused “global cooling” go here: http://hockeyschtick.blogspot.com/2011/05/geophysicist-dr-nils-axel-morner.html. Personally, I pray for global warming. I hate the cold.

One notable exception to this trend of the U.S. government making oil off limits and endless meddling is the Williston basin (see also: http://www.bakkenoil.org/) that is currently being developed, but the EPA and others are already looking for ways to destroy that success story.

If you want lower oil prices you need to see our country do the following:

1) Return to the gold/silver standard (this will stabilize pricing)
2) Shrink government to it’s constitutionally enumerated powers (so the Federal Reserve doesn’t have to print so many dollars to buy U.S. Treasury debt which debases the currency and drives up price inflation and oil prices.)
3) Allow U.S. energy companies to drill in the gulf, drill in Anwar, and drill in the Western states. Allow for the building of more refineries to relieve that bottleneck, increase supply and drop prices.
4) Allow without punishment the use of coal, and nuclear power while opening up oil fields and encouraging the increased use of alternatives such as natural gas that are plentiful and cheap and don’t hurt the environment.
5) Get the U.S. government out of the regulation of the energy business, and out of managing the environment. Let the states manage their own environments. If the federal government gets out of the energy business, and gives the lands back to the states, we’ll see production soar, and costs fall. At least $.40 of ever dollar spent on gasoline today goes to government for leases, taxes, royalties, etc. Government meddling and taxation and monetary inflation are the main reasons for high prices in fuel.
6) Get government out of trying to develop energy technology (it will always fail as it did with Solyndra–see: http://en.wikipedia.org/wiki/Solyndra). Let private industry do what it has always done so well, develop energy. The most efficient way to develop new technologies is to let the energy market operate freely. Cut taxes and government spending so investors will have capital to invest wisely in emerging energy technologies. There are great technologies with great promise. We don’t need government to steal from the people to give to their cronies. Let the people vote with their own money where the investment should be made.

Give us a free market in the energy market and the cost of fuel will drop while the quality of the fuel increases and supply meets or exceeds demand. That’s the nature of competition and free markets.

(A short related article worth your time: https://www.area-info.net/articles/show.php?cty=Salt%20Lake%20City&st=Utah&article_id=931 and this one is especially good: https://www.area-info.net/articles/show.php?cty=&st=&article_id=958&t=Acceptance_Of_The_Unsubstantiated_Global_Warming_Theory_Could_Harm_Our_Economy.)

leverton

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