Staggering Idiocy on Oil

Townhall.com ^ | February 25, 2012 | Mike Shedlock

[Kaslin]

Bernanke is hell bent on producing price inflation. He has succeeded, just not where he wants most. What Bernanke desperately wants is for housing prices to rise because that more than anything will help the banks and all the foreclosed properties they are sitting on.

The Bernanke Fed has certainly assisted the stock market, as intended, but that is not doing the average Joe much good in the face of soaring oil prices, soaring food prices, falling home prices, and zero% interest on savings.

Oil Shock Coming

As a direct consequence of Fed policy, in conjunction with an inane US and European oil embargo on Iran, Europe (already in the midst of what is going to be a long and deep recession) will be hit with an oil shock on top of it.

Record Price of Oil in British Pounds

On Wednesday the Financial Times reported Record sterling oil price sparks fears

Oil prices have soared to a record high in sterling terms and are approaching euro highs, raising fears that European countries struggling with heavy debts will face further barriers to economic recovery.

“This is a regional oil shock,” said Amrita Sen, commodities analyst at Barclays Capital in London.

Brent rallied to £78.48 a barrel, passing the previous all-time high of £77.71 a barrel set in April last year at the peak of the Libyan civil war supply disruption. In euro terms, the oil benchmark reached a three-year high of €92.70 a barrel, a fraction below the peak of €93.50 a barrel set in July 2008.Record Price of Oil in Euros

It took precisely one more day for the Financial Times to report Euro denominated oil hits record

Oil prices soared to a record high in euro terms, surpassing the peak touched in the 2008 price spike and posing a fresh problem for eurozone economies already struggling under the weight of the region’s debt crisis.

The euro-denominated price of Brent crude, the global benchmark North Sea crude, rose to a peak of €93.63 a barrel on Thursday, surpassing the previous high hit on July 3, 2008. The new euro record comes just a day after Brent hit a record in sterling terms.Nancy Pelosi Blames Speculators

The Hill reports Dem leader Pelosi blames Wall Street for spike in gas prices

Oil speculators, not a lack of domestic drilling, are to blame for the nation's rising gas prices, the top House Democrat argued Wednesday.

House Minority Leader Nancy Pelosi said unscrupulous Wall Street investors have artificially inflated prices at the pump, which are climbing toward $4 per gallon.

The California Democrat called on Congress to take "strong action" to rein in the allegedly excessive speculation, and accused Republicans of protecting Wall Street profits at the expense of consumers.

"Wall Street profiteering, not oil shortages, is the cause of the price spike," Pelosi said in a statement. "Unfortunately, Republicans have chosen to protect the interests of Wall Street speculators and oil companies instead of the interests of working Americans by obstructing the agencies with the responsibility of enforcing consumer protection laws."Irony of it All

No one gives a rat's ass if speculators drive up the price of houses or the stock market to absurd heights. Indeed, Congress goes out of its way to actively promote rising home prices.

The Greenspan and Bernanke Fed did the same. Now Bernanke openly takes credit for the rising stock market and encouraging speculation.

And where the hell is the blame for this absolutely inane embargo on Iran?

No Iranian Nuclear Weapons Program

As a matter of record, Israeli intelligence concluded in January of this year, there is No Iranian Nuclear Weapons Program!

As Gen. Martin Dempsey, Chairman of the Joint Chiefs of Staff, arrived in Israel Thursday, the left-leaning Haaretz newspaper dropped its own atomic bombshell.

Israeli intelligence agencies have worked up an intelligence assessment that Iran has not yet decided whether to begin a military program to construct a nuclear warhead. Put in other words, Mossad believes that there is no current Iranian nuclear weapons program. Haaretz writes:

“The intelligence assessment Israeli officials will present later this week to Dempsey indicates that Iran has not yet decided whether to make a nuclear bomb. The Israeli view is that while Iran continues to improve its nuclear capabilities, it has not yet decided whether to translate these capabilities into a nuclear weapon – or, more specifically, a nuclear warhead mounted atop a missile. Nor is it clear when Iran might make such a decision.”

This is the same conclusion to which the 16 US intelligence agencies have come in 2007 and 2010. It is also consistent with what the Iranian government itself says, which is that the Iranian nuclear enrichment program is a civilian one and that Iran is not trying to construct a nuclear weapon. Likewise, the International Atomic Energy Agency, which continues to inspect Iranian nuclear facilities, has repeatedly and consistently stated that no nuclear material has been diverted from the civilian program.

Haaretz says that Israeli Minister of Defense Ehud Barak gave an interview with the Army radio, in which he come to another surprising conclusion. Asked if Israel plans a military strike on the Iranian nuclear facilities in Natanz near Isfahan, Barak replied: “We haven’t made any decision to do this . . . This entire thing is very far off.” ZeroHedge properly blasted Pelosi two days ago in his take Nancy Pelosi Issues Statement On Soaring Gas Prices

Speculators? Such as the Federal Reserve and other central banks who have pumped $2 trillion of "liquidity" into the capital markets in the past 3 months just so Italian BTPs don't implode to fair value and so Europeans can continue living in a socialist "paradise" even as the bankers steal their gold?

Or is it the same congressional speculators who until recently had every right to front run the public on advance knowledge that the SPR would be tapped due to Democrat insistence to sacrifice America's last energy backstop only to win the election?

Whatever the reason for the gas surge, with these idiots in charge, one thing is certain - the situation is about to get far, far worse.Staggering Idiocy

The idiocy of this government and central bank created mess is staggering. The Fed is actively encouraging speculators and the Obama government is angling for another Mideast war over weapons of mass destruction that once again do not even exist.

Instead of placing the blame on the Fed and on the warmongers, Pelosi is enough of an outright idiot to demand Congress do something to rein in speculators.

[AdSimp]

My grandfather would proudly remind everyone that he could raise 7 children making $3 per hour in the 1950’s. I stopped wondering when I found out what 3 per hour in silver is worth today.

[upchuck]

The Fed has injected so much liquidity (Printed Dollars) in to the markets in the last few months, that it has SIGNIFICANTLY DEVALUED THE DOLLAR

Correct!

And that is why other countries are beginning to discuss replacing the American dollar as the world reserve currency.

You see very little about this in the press. But if it happens, it will put a hurt on the US the likes of which it is hard to imagine.

An ex tag line of mine: Think you know hardship? Wait till the dollar is no longer the world's reserve currency.

[Battle Axe]

I don't have any numbers on costs or grades. I began some research and found that the closest thing to what was needed was a byproduct of brown algae.

I'm sure Mr. Google will be able to help you.

[FightThePower!]

I like that you relate purchasing power to gold, and you could also look at silver. I think the flaw is that Americans are not paid in gold or silver and have not been over that time. Our money has been debased and the high price of gold and silver is a symptom of that.

Consider Henry Ford’s $5 work day. At the time gold was worth $20 per ounce. So unskilled labor was earning about $425 per day in terms of gold today. That comes out to $110,500 per year. How many unskilled laborers are making even half that today?

Another example from 1963 using silver. When my mom got her first teaching job out of college that year, she was paid $100 per week for 40 weeks of teaching. A silver dollar was 90% silver at that time. So she was being paid 90 ounces of silver per week. 90 ounces x 40 weeks x $35 per ounce in today’s dollars would be $126,000 per year for a teacher right out of college.

These two examples show just how poor and how little purchasing power the average American has relative to what they had in the past. This is why we need a two income family to have the same lifestyle as a single income family had in the past.

[kabar]

And where the hell is the blame for this absolutely inane embargo on Iran?

We (Europe) should have put the embargo on a long time ago. The author misses the point. The fact that oil prices are volatile and that the major exporters of the commodity can bring the global economy to its knees should be reason enough for the US to develop its own energy resources. That is the message of high oil prices, not wild speculators.

[rockinqsranch]

Dropped by the old Doughnut Shop to visit with the locales for the first time in a long time yesterday. The conversation turned to gas prices, and the lead locale said “wuz cuzza spekulaters”

I asked him what they based their speculation on?

He looked at me as though I was some sort of evil Demon.

[aruanan]

the lead locale said “wuz cuzza spekulaters”

I asked him what they based their speculation on?

He looked at me as though I was some sort of evil Demon.

I would have thought, based on his stupid response, that he would have looked at you with a glazed bovine stare.

[PSYCHO-FREEP]

LOL! Well then, call me a “Speculator” becuase my significant number of Oil stocks are up 75%!

[G Larry]

Let’s see...

1-Enriching uranium beyond the point of application for anything other than a weapon.
2-Developing missile delivery systems capable of carrying a nuclear warhead.
3-Deeply buried weapons facilities scattered around the country.

Oh....but we don’t know whether they’ve decided to integrate these elements.....

[4Liberty]

Blaming “speculators” is like shooting the messenger.

[The Great RJ]

The biggest idiocy on oil comes from Obama’s pronouncement on algae being the solution to high gas prices. We have oil, oil shale and natural gas in abundance in this country and with proven and decades old technologies can extract and use this oil, so why do we need to spend years of research and countless billions in taxpayer money to develop oil from algae that might easily prove to be impractical on any commercial scale? This algae thing from Obama is likely tied to some supporter who wants to gets millions of taxpayer dollars on some phony scheme just like Solyndra.

[G Larry]

Try this:

Business is all about managing risk.
When you don’t know the cost of each additional employee, that represents unknown risk.
When regulations pop up at the drop of a hat, you have no idea whether your planned investment will be allowed to produce results, let alone a profit.

Obama is trying to destroy America on several fronts;
Government takeover of insurance access, while pretending that is “healthcare”.
Shut down of energy exploration, while pretending “green energy” has any potential replacing fossil fuels.
Taxing the job producers out of existence, while pretending it’s better for the government to redistribute that money, rather than have the recipients earn it.
IF Obama puts America in so much debt that it can’t get out, he will have been successful at destroying the country that he perceives as having had it too good for too long.
In all of his writings and the very culture of his upbringing with communist parents, grandparents, and mentors, there is expressed a loathing for those who’ve dominated the world, as they see it, at the expense of the rest of the world.

[JudgemAll]

Indeed, government preferential treatment for this or that business has always been total failure breeding quacks of all kinds. We are going to get screwed again. Everything that Obama touches will turn to crap.

[PSYCHO-FREEP]

Your bland ignorance is amazing.

For one thing, the formation of Oil, hundreds of millions of years ago, was due to a planetary environment that would have been impossible for humans to exist. The atmosphere was made up of more than double the Carbon Dioxide found today and the most life on Earth, was in the Oceans. (When water covered more of the Planet than it does today.)

The kind of Algae you claim will manufacture all of our energy needs, (And is therefore possible.....[Eyes Rolling]) grew at levels that would not be possible on this modern Earth. You also don't realize the chemistry, or the physics behind the original formation of Oil and Hydrocarbons.

If you are going to advocate something, then make a useful effort to educate yourself fully in the first place. You sound patently and incurably ignorant at the moment.

http://geocraft.com/WVFossils/Carboniferous_climate.html

[JudgemAll]

What is staggering is the number of idiots still willing to consider him or vote Romney.

There is a big push for Romney, but it is part of a bait strategy from communists. It’s to maintain the sort of management of a pyramid scheme, its language of proxy leader, and keeping ahead of the boat and keeping it going, milking.

[katiedidit1]

The New Obamamobile..fueled by algae and coming to a Pond Scum Dealer near you. Let's hope it doesnt disturb the habitat of the endangered mosquito or albino frogs

[Darth Reardon]

I’ve never heard people blame speculation when prices are falling. I guess speculation is a magic money machine, whereby people can make bets that always win?

[Optimus Maximus]

Listen to Newt destroy Piers Morgan regarding Obama's energy policies and the resulting rise in prices, and how to get prices back down. Newt also rips Piers on the administration's apologies in the wake of the recent violence in Afghanistan. http://www.cnn.com/services/podcasting/popups/piersmorgan_audio.html

[iopscusa]

Where are the Free Market warriors...not in the Federal Gov., not from Crony-Cap Romney, Professor Gingrich, Rick Big Labor Santorum but at least the crazy old coot Ron Paul does seem to be supportive of free markets and good money.

[ripley]

Progressive scu&bags in action.

IMHO