Home Forums Hunting & Shooting Hunter's Campfire Don't blame the oil co's

Interesting article this morning.


http://articles.moneycentral.msn.com/Investing/StrategyLab/Rnd17/P1/HighIQjournal20080524.aspx

I don't blame the oil companies, I blame the Federal Reserve and Congress. The Federal Reserve has devalued the currency so it takes more dollars to buy the same amount of oil. Check M3 growth next to oil prices, then check oil priced in gold. You'll see that you can buy the same amount of oil for the same amount of gold, but your "dollars" have lost 90% of their purchasing power.

The second area of blame goes directly to Congress and their needless restrictions on energy generation, not just in oil, but in any non "green" energy source. Of course when you blame Congress, look in the mirror, because we put the current morons in office, and are determined to keep them there.

Edited to say, check out the oil/gold and oil/M3 (dollar) ratios from 1971 to date, but especially since 2001 to 2008.

A currency can be deavlused in either of two ways:
1) a government can just say that it's currency is worth less in terms of another medium (e.g., gold or another currency) or,
2) other countries and investors may just not want your currency any longer and it will drop in value (just like big SUV's on dealer's lots).

In the case of the dollar's decline, other countries do not want to maintain large holdings of dollars and are dumping them and buying Euros and other currencies - people are just not willing to buy our dollars and the value is less, costing us more for anything we import.

Yup, I was just reading the other day that if a dollar was worth a dollar, oil would $10 a barrel and gas would probably be about .30 a gallon. A devalued dollar and not being able to get oil where ever it is is what's costing the price of oil to sky rocket.

No matter who gets the White House, taxes have to double to soak up all the cheap dollars if the dollar is to gain value. There are better ways to soak up cheap dollars but it looks like taxes and interest rates are what we are going to use.

I Know it's early yet, so the usual band of "Sisters" are most likely not up yet. But just wait a while and we will see the same band of "Blame America/Big Oil/Bush-Chaney" and "We need to elect RP or BB" Lefty Lucy's posting their usual diatribe in rebuttal to the rest of the campfire members.

Jim Berry

Well, I'm far from a "lefty lucy" and I voted for Ron Paul. I don't blame America or big oil or Cheney for anything. I do blame the ignorant among us for allowing the environmentalist lefties to hijack our energy policy, and the Federal Reserve for destabilizing the currency.

I voted for Ron Paul because he's the only candidate with any sanity regarding economic policy. He understands, as I do, that you can't wage war or maintain an empire if you're bankrupt, and we as a nation are pretty well there. There aren't enough tax dollars or wealth in this entire country to pay off our obligations, and our trading partners are getting tired of taking our faith based currency in return for commodities and finished goods when they can see it being devalued by the day. If you check the TIC (international capital) data, you'll see that foreign buying of our T Bills and Bonds has fallen off dramatically, and that interest rates are beginning to creep up, especially in the 10 year and 30 year products. You see and experience this loss of purchasing power for yourself every time you buy food or fuel, or just about any other product, and it's only just getting started. None of the remaining candidates of any party are addressing these issues, and as a matter of fact are going to make them worse with their proposed spending on various programs, as well as implementation of "Global Warming" legislation a la Lieberman-Warner, or something similar.

The only things making Senator McCain acceptable at all are his commitment to our operations in the Middle East, and his possible appointments to the SCOTUS. IMO, the former will suffer because of our debt load and weakening economy, and the latter is a pipe dream based on campaign rhetoric. I can't bring myself to vote for a man who will bring us the the same destination as the others, but at a slower pace. No pun intended, but your mileage may vary.

Don't forget he wanted to legalize prostitution and drugs, as a bonus plan.

Why not? Then we can place a sin tax on them, which in turn would help stabilize the dollar, and pay off the national debt.