Thursday, April 26, 2012

Gas Prices Headed Lower, Predicted Here First on March 1

While the entire world was in full panic mode during February and March of this year and believed 5.00 gas was going to be a reality everywhere, I firmly believed that was bullshit and said so here on March 1.

Absolutely nothing I was reading supported that scenario. Now gas prices are ticking down.

Here was my original piece. I am never afraid to take a stand or be a contrarian. That  philosophy however has caused me to eat crow once in awhile. That's ok. I dine alone mostly.

Here at Frankenstein Government (the writers, me) are never afraid to stick our necks out. The absolute worst thing that can happen to me is that I will write something so outlandishly fucking stupid that I will live to regret it.

They give us a delete button for a reason.

I have been pondering the rise in oil prices and my personal opinion is that high oil prices are not the effect of consumption driven demand pricing. The demand for oil in the U.S. has fallen off a cliff. In England- it is even worse.

So why are oil prices so ridiculously high?

Answer- Oil prices are manipulated first and foremost by the oil producers and they are priced in a fiat currency (dollars) that can simply be replicated and counterfeited.

So who is that in the strait of Hormuz? Who is that rattling sabers? Oh yea, that's Iran- a big oil producer. It does not hurt them, OPEC, or the price of their oil to act like they are bent on starting WWIII. The worst thing that can happen is that oil producing governments around the world, the great oil cartel, the great oil producers- all make more money.

This at a time when they ought to be giving the stuff away.

The demand is simply not there. It has been manufactured. There is simply no way that US oil demand can drop 30%, the Bakken pipeline is choked full of oil, and we are exporting the stuff as fast as we can. Therefore demand and tight supplies don't have a damn thing to do with current oil pricing. Greed, bullshit, and saber rattling do.

The other reality is that oil priced in dollars has to go up. Anybody with a calculator can see that America will simply try to print more money to buy oil. The price goes up as the money supply increases. That figures in.

I also believe we are in a worldwide recession. I believe that oil is about to tumble. A bold prediction just ahead of the driving season- I know. I've been looking at bicycles and I bought the Elantra just in case I am wrong.

I wrote a piece two years ago wherein I said that our economy cannot afford any kind of recovery. I still believe that. Inflation will absolutely go through the roof given the excess money printing that has taken place. If you really believe that the world is about to embark on a great economic boom- you should go down to the store and buy all of the precious metals that you can lay your hands on.  And maybe a big storage tank for gasoline.

Oddly enough, economical car sales have taken off. This is not hurting Obama or his re-election chances. You don't need a bona fide recovery to win- just the perception of one. I find the whole oil price out and buy fuel efficient cars...prop up the sagging economy... during an election year...more than just coincidence.

If the big recovery happens, I am going to get rich. I am prepared for the great inflation. I am also going to hit the delete button on this piece and I deny I ever wrote it. Give this latest BS pricing increase a month- we'll see if it sticks and stays. I bet it doesn't.

1 comment:

Anonymous said...

Bingo! That's why I'm voting for the Massachusetts Democrat. Well, that and I want to watch Paul Krugman explain again why the Fed printing money is a good thing.