How greedy people jacked up price of gasoline for themselves.

A lot of people bitch these days about high price of gasoline in United States. In this post, I will show that in fact:

1. Gasoline is super cheap in US

2. "Peak Oil" in US happened because of "Peak Greed".

3. US consumer has lost his priorities.

4. It's going to get worse.

1. Gas is still very cheap in US. In fact, it has gotten cheaper than ever! This spring (2008), we pay about 10 cents a gallon of unleaded, how can you call this expensive? Gasoline was sold for 30 cents a gallon in 1920, and it fell threefold during last 90 years.

Gas at $4 per gallon is still only 1/225 of an ounce of gold at $900 per troy ounce ($900 / $4 = 225).This means that in pre - Roosevelt dollars ($20.67 = 1 troy ounce of gold), which were ordained by the constitution for Americans to use, the gas is about $0.092 per gallon ($20.67 / 225 = $0.092). Pre - Roosevelt dollars? Yes, those are the dollars we are supposed to have, and not the FED paper notes.(IF you are American and support the Constitution, that is).

So, you see that the price of gasoline is not high, but very low, three times lower than when Americans first started to pay attention to it. You are getting paid in ever-depreciating FRNotes, that is true, but then you should bitch about FRNs and yourself not supporting the Constitution, and not about the price of gas.

2. There was never a peak oil in US. Get over this propaganda. What had happened was that many freedom-loving and independent Americans stopped being Americans and started to look in other people pockets, and frequently helping themselves into those pockets.
Particularly, they were attracted by the pockets of oil industry giants.

When US went bankrupt, Nixon was printing FRNs like there was no tomorrow, which is of course as you know pure inflation. But, in 1971, he was also "fighting" inflation, by stealing money from real Americans who were still capitalists. Population in general was happy, - those bad capitalists should suffer! This was called wage and price controls, you see, Nixon was pumping money, but didn't want any consequences, so he controlled the prices. Producers could not raise their prices to compensate for ever cheapening FRNotes, and had to remove the product from distribution.

By 1973, as I've been told by Dave Fairtex, these were lifted, except the ones on oil, because oil companies were considered to be too rich for an American company. This went on till 1980. Then it was windfall profit tax all the way through 1988. So, you can see that from 1971 to 1988, for 17 years, the oil industry was systematically robbed, for "the common good".

What did the oil industry do? It did what any self-respecting capitalist would do, - moved out. Now these companies are buying foreign crude and sell it to US refineries, keeping the difference in off-shore jurisdictions. US has left them no other way to keep their money. Essentially, they did the same honorable thing Founding Fathers did, except they didn't take any land from abusive empire.

The oil production in US peaked in 1970, and went down ever since. Why? The abusive taxation was completely repealed in 1988? Sure, but would you go back to England after you have made your home in US? Didn't think so. Similarly, the numbers of free-from-empire oil companies just grew through "immigration" or others, leaving the US at a later time to join the off-shore freedom community.

This is why there is less production in USA, forget you peak-oil stories, those are for democrats and other idiots. Or may-be they are right. I guess one could argue that the pilgrims left their lands bound for new world because of natural peak of religious freedoms, and not because of horrible prosecution their home countries imposed on them.

3. US consumer has lost his priorities, which is just another reason why people say that oil or gasoline is expensive. It is not by any means. Make this experiment: Add up your own unnecessary expenses, such as cable tv, satellite, paid radio, fitness clubs, dining out, gaming expenses, music downloads, pet food and care, cigarettes, liquor, condoms, starbucks coffee, designer clothes, bottled water, text messaging, and whatever else you can remember. Now compare that with your monthly expenses on gasoline.

Gasoline is essential, it gives us freedom of movement at less effort and higher speed, and it carries our goods with us. Discretionary expenses above are joy of life, of course, but they are completely unnecessary. People who have them and yet complain about cost of gasoline are just lost their priorities or never had them. Those things should only be bought when your income is high enough, but then the gasoline wouldn't matter either.

This needs to be adjusted. Important product such as gasoline needs to take it's priority place well above all the fuzz that no one life depends on, and it will take that place.

4. It's going to get worse, a lot worse. Consider the movement to consume less gas, for example. Right now, we are able to negotiate beneficiary pricing for ourselves due to the volumes of crude we are buying. Let us say that we manage to reduce our consumption in half, by driving funny European little parodies on cars, tin cans with solar engines, trash-eaters and the like. Since our volume of oil purchase will fall, so will our ability to negotiate better pricing. So, picture your wife not in a safe Tahoe, but in a tinfoil "green" parody vehicle. If she gets into accident, she will more likely to be seriously harmed in that tinfoil car, than she ever was while driving Tahoe or Crown Victoria. But because we will buy less gas, you will likely continue to pay same prices as you do pay now, plus the inflation! This is the way of a weak, and it will not and should not result in a victorious outcome.

Congress is looking into the rise of oil prices, and it can't see it's own tracks, of course. It can't see the inflation they have unleashed in order to save their well connected buddies in business and banking. What they see, is same old thing every socialist sees, or prefers to "see", and that is of course, the speculation. In a socialist's mind, the market is always wrong, and needs to be regulated.

And regulated it will be. Congress will adopt commodities speculation controls, and it will achieve two things in doing so: It will make it harder for on-the-edge-of-bankruptcy firms to stay afloat by replenishing their profits that they have lost on CDOs, and secondly, there will be a tendency created for the speculators to move their activity off-shore, and so there will be a capital outflow from US, resulting in capital controls and a complete halt of economic activity in USA.

Beside these two short term consequences, the long term one will be that necessary adjustments, that speculatively bid up price of oil was designed to bring about, will not be made. The country will instead slowly and powerlessly stagnate into a state of energy impotency, where the prices of energy are not allowed to command an increasing investment, since this will be banned by congress "for the common good", and so, outdated and uncompetitive technology will not be replaced, insuring the status quo for years to come. By status quo I mean, of course, higher energy prices that anyone is ready to pay.