Posted on 05/05/2011 9:06:51 AM PDT by bananaman22
The fate of the Obama presidency hangs not on a birth certificate or the red ink on the federal budget but by the hose nozzle of your local gas station.
Electoral discontent is measured by the price of a gallon of gasoline. Heading past $4 toward $5, that is a lethal trajectory for President Barack Obama.
Enter the demagogues, especially the clown-in-a-business-suit, Donald Trump. Unfettered by the gravity that goes with facts, Trump says that he would fix the oil price – now around $110 a barrel – by facing down the producers, particularly the Organization of the Petroleum Exporting Countries (OPEC). He told an interviewer on television that he would call OPEC and tell them to pump more or face the consequences. The latter, he did not specify. War? Against whom?
In a compelling book by Leah McGrath Goodman, “The Asylum: The Renegades Who Highjacked the World's Oil Market,” the author lays out the ugly fact that often – in fact, as often as not – the price of oil is set not in Vienna at the headquarters of OPEC, but in downtown Manhattan at the New York Mercantile Exchange (NYMEX).
Tens of thousands of future contracts are traded in nanoseconds at the NYMEX, and the price of oil is set. This price affects not only the price which will be paid when these contracts expire and delivery takes place, but also, according to Goodman, the all-important over-the-counter market, where sellers trade more directly with buyers without government oversight.
Goodman contends that there is little oversight of the NYMEX because the agency charged with the role is the weak and ineffectual Commodities Futures Trading Commission (CFTC), where many staff and commissioners are busy burnishing their resumes so they can cash in later as market executives. Full article: Oil Markets
Down 6 bucks a barrel right now. Fund managers and speculators are jumping out. This could be the break we’ve been waiting for.
“Spook?” That’s racist.
Wouldn’t count on it.over-the-counter market, where sellers trade more directly with buyers without government oversight.
“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” - Barrack Obama’s Energy Secretary Steve Chu
Oil will go down and then up higher and down and then higher still... food is not going down... clothing is not going down and the dollar will crash most likely. Some of you operate like these are text book times. You delude yourself. The Fed has no idea what to do and they have only made things worse with their meddling. If they do not know... neither do any of the other so called experts. We are not in normal times... external and internal powers are trying to destroy us... and that is the bottom line.
LLS
Peg food prices in barrels of oil for foreign purchasers. The dollar may be toilet paper, but they need food to survive.
Peg food prices in barrels of oil for foreign purchasers. The dollar may be toilet paper, but they need food to survive.
The price of oil in the futures market is a reflection of what the collective consciousness deems the FUTURE price of oil will be. Right now that collective consciousness believes the future price of oil will be higher, for a variety of reasons. Here are a few:
1. The President, his energy secretary, and his entire administration have vowed to increase the price of energy in one way or another. The fact that they have succeeded seems to auger for even more price increases in the future.
2. Domestic "energy policy" is geared to shut down drilling and exploration for oil. When you cut future supply, you give people the impression that prices are going to increase.
3. Foreign policy in the middle east is a complete disaster. There are four wars going on in the oil producing region at this time, and the possibility of several revolutions. This includes wars in Libya, Iraq, Afghanistan, and off the Samoli coast. The markets are pricing in an embargo or further disruption of tanker traffic. Factor in the Iranian situation and its a wonder prices are so low now.
4. Demand is at least stable to increasing as China and India buy more and more energy in the form of oil. Increasing demand means higher prices.
5. The left has introduced the concepts of green energy and its corollary, dirty energy. Dirty energy means coal and oil, which the US has in abundance. They claim dirty energy is a finite resource and must be ended for environmental reasons. Both ideas are false.
I could go on and on. I leave you with this, the President could cut the price of oil in half IMMEDIATELY if he wanted to. All he would have to do is initiate a real energy policy geared to producing as much cheap energy as possible as soon as possible, to wit:
1. Sweep aside ALL impediments to exploration and drilling everywhere in Alaska and the CONUS.
2. End the "boutique blending" of gasoline.
3. Announce the sale of 50 million barrels of crude from the SPR to domestic refiners at 75% of the market rates.
4. Build 20 high tech, modern nuclear power plants.
5. Build 10 coal to oil plants.
If Hussein announced these five policies, prices would drop immediately, and they would stay down. The fact that he won't make these moves keeps prices high.
The speculators are simply making rational decisions based on a rational observation of current conditions. Don't blame them.
So is "Geronimo".
So is "Target" and "Bullseye".
At some point our vocabulary will not include metaphors and be down to about 1,500 acceptable words.
Progress in freedom and expression?
The capitalists must be punished, and capitalism destroyed. This is part of the plan; it is working, Comrade!
Oh, and I forgot. A certain percentage of the increase in price is because oil is denominated in US dollars and the US dollar is losing value quickly. Producing a barrel of oil requires some productive work and you have a commodity that has some worth. Producing a $100US bill is accomplished with the push of a button, and the button is being pushed too much.
American Presidents used to do this all the time. The west ran circles around OPEC. Because of the policies of the Obama administration the supply is kept low, WHICH IS WHY THE TRADERS ARE HAVING SUCH A BIG AFFECT. The Obama Regime's policies are a direct cause of the speculators having all that leverage. It ain't rocket science.
You said it better than I did in Post 15. Good job.
Sorry, the words 'freedom' and 'expression' are now on that 'list'. Please use the words 'workers' and/or 'union'.
": )
All the soft commodities are also declining of the current highs. Grains, too. Much of the food price increases were tied to diesel, so a 6% decline in oil should, at the very least, stem the rate of price increases in everything using gasoline as an input. The USD has strengthened, even while the bond yields have declined, likely due to declines in the Euro.
I agree that this is not textbook times and that there is going to be continued volatility. I also suspect that the PTB are using regulatory means to tamp down futures trading, as much as they can to give zerO a more favorable economic environment for 2012. Bottom line is that I expect short term price stabilization and some seasonal declines.
Probably not a bad idea to treat it all as a prepper buying opportunity.
Thus proving that gas prices are racist.
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