OPEC - Oil To Reach $170 This Summer; West Leaders Look Dazed

You gotta get the speculators out of the way the price is being generated, and to do that you gotta change the law in the USA.

Anyhow $170 today will buy what roughly what US$85 bought back in 2001.

The real problem is the free-fall death of the U.S. dollar.

And that can be change by law too -- to reassert the Constitution, dump the Fed, eliminate fiat currency, and come up with real money.

[edit on 7-7-2008 by splendourinthegrass]

reply to post by splendourinthegrass

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1) Free fall of dollar? Yes. We're running a HALF Trillion dollar annual Federal shortfall. TOO much tax cuts, not ENOUGH revenue. Simple. But when you make a habit of it, the R&Fs (Rich and Famous) get a bit worried.

1A) Annual trade deficits EXCEEDING a Half Trillion Dollars. The US has a net worth of about $75 trillion. That's everything. The Yellowstone, the Mississippi River, your bank account and mine too.

America is sort of like having a $10,000 credit card limit. But every time you reach your limit, the card company extends you MORE credit. At some point it time your creditors will say NO MORE!

2) We cannot DUMP the Fed. You cannot run a $15 t. American economy in a $60 t. world economy with a few gold coins rattling in your pocket. Get over it! There is nothing wrong with paper money. It is how you manage your economy that is wrong. Don't throw the baby out with the water!

[edit on 7/7/2008 by donwhite]

reply to post by Inannamute

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I've been known to miss the point before. And you are right. At least that is where the merchants are putting the blame for raising food prices every day.

But figure this: Fuel in an over-the-road tractor trailer - an 18 wheeler - cannot exceed 20% of the cost of running the truck. If you amortize the cost of the rig I'd guess closer to 10% is fuel costs. Maybe less.

And more ripple down effect. If the cost of food on your grocer's shelf is alloted around the various components, I'd say again, that transportation cannot be more than 10-15% of retail. (And I don't believe it's that much).

So, if you DOUBLE 10% cost of fuel, and apply that to 15% of retail price, then .2 X .15 = 0.030. A 3% increase of retail prices based on doubling the cost of diesel fuel. This is Milton Friedman's FREE Market at work! Or, the RICH screw the POOR again.

[edit on 7/7/2008 by donwhite]

Great, but what do you do after 60 days? It would just be back to the same old song and dance. One thing Americans are good at is gluttony. Just go check out your local all you can eat buffet. Do the people there really need to eat 6 slices of pizza, 6 cinnamon sticks, and 3 large glasses of root beer? No, but they do it because it's cheap and they can.

If you released gas at half price then you'd just have more Americans driving circles around the parking lot for 20 min. trying to find a parking spot that kept them from walking more than 50 steps to the front door of Wal Mart.

At any rate, this isn't about politics. It's called demand exceeds supply. Naturally the prices will keep rising until demand falls off. If the supply side were to increase then prices would fall. The world's oil producers can't do much over 85 MBD.