 While millions of people around the nation are complaining about the price of a gallon of gasoline, the profundity of the issue does not lie with the price of a barrel of oil, but with the economy overall. It's about the downhill slide we're on. It's about the fact that you can only have a downhill when there's an uphill on the other side of it. That uphill is foreign economies. So let's summarize something so you can pass this along to people who need to get a grasp on reality – no spins. GAS PRICE >> PRICE PER BARREL OF OIL >> TIED TO DOLLAR >> FALLING VALUE IN OTHER COUNTRIES
Very simply put, this means that any country whose oil price is the same as ours per barrel (most of them), the price of oil is either falling or staying the same. While the companies keep
pushing prices up around the world, it will still be cheaper for say, a Canadian or Mexican company to buy oil in America and then ship it across the border as their money rises in value against the dollar. So while a local gas station in Mexico city may raise its prices citing the rise in the price of a barrel, it's really going down there as long as there is a competitive market. This means that as long as inflation continues to grow, not on a straight line but on a curve (inflation is rising), the value of the dollar will be weaker against other countries. Since we get our oil from other countries, we will be paying more per barrel than anyone since our money is worth less. As put in http://www.oil-price.net, Currently all three major oil markets (WTI, NYMEX, IPE) trade barrels of oil in US dollars. Consequently any country buying oil needs dollars to pay for it. This enables the US Federal Reserve to issue huge volumes of dollars to meet increasing demand for oil. In return oil producing nations invest dollar proceeds in US treasury bills, allowing for the current US budget deficit.
Most oil still passes through the three older markets, hence it is becoming cheaper and cheaper for other countries to buy the same oil the US does by simply trading their money for US dollars. Therefore, we can see that the problem is not in the price of oil, but more so in the economic downturn that is sweeping our nation. This downturn is the fault of many factors, and would be inevitable no matter who was in office, or whether or not the fed existed, as long as we had an open capitalist market. The Crash of that market, however, would have come much swifter and ended long ago, around 2003 or so and would be recovering now. The government, however, has no need for things to go this well. It behooves some of the current administration and their friends to let the economy collapse until we have no choice but to scrap the dollar and adopt a policy centralizing currency with other countries. Possibly all of North and Central America, or possibly more countries, reaching into South America, or maybe even a few less. Solidifying this currency would put very few people in power with an enormous amount of wealth control, while the rest of whatever wealth was left would have to be shared by hundreds of millions of people. Can anyone say: “Global Capitalization – 2.0”?
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