The Silver Bullet On Obama

Interesting observation that Our Lord and Savior Barack Hussein Obama says there is no silver bullet in dealing with high gas prices.

His weekly radio sermon continues to stress the mistaken notion that America needs to invest in green, renewable energy instead of dealing with the here-and-now of producing our own energy and increasing supply to deal with increasing demand.

The Messiah’s poll numbers are tumbling, not so coincidentally as gas prices rise. They crossed $4 a gallon here the other day, and have been north of that, approaching $5 a gallon in other parts of the country for some time now. The highest price is at an Orlando, Fla., station, which is charging $5.69 a gallon for regular unleaded. Nationwide, thanks to the increasingly worthless dollar, made so deliberately by Obama Regime policy. As the dollar becomes worth less in value, it takes more dollars to buy oil.

That does not take into consideration federal mandates for specific blends of gasoline, such as here in southeastern Wisconsin, which are in short supply.

Here’s an interesting analysis as to how gas prices don’t necessarily match up with the price of crude oil.

NEW YORK (CNNMoney) — Gasoline prices have been rising for months and are within striking distance of their 2008 all-time high of $4.11 a gallon. But while oil prices are above $100 a barrel, they’re still 24% below their 2008 all-time high.

So why is gasoline so expensive, when oil is so far off its record price?

The answer is that the price of oil Americans see every day has little to do with the price of gasoline at the pump.

Those prices are for a particular type of oil — West Texas Intermediate — that’s stored in Cushing, Okla.

Thanks to increasing supplies from the Rocky Mountain states and Canada’s oil sands, plus a lack of pipelines to move that oil out, there’s currently a big glut of oil in Cushing. That’s pushing the price of West Texas crude down.

Prices for most other types of oil, which make up the vast majority of oil that refiners use in U.S. gasoline, are much higher than West Texas Intermediate. London’s Brent crude, for example, was closer to $124 a barrel on Wednesday.

Here’s another which places much of the blame on those eeeeeeeeeeeeeeeeeevil oil speculators, a la Bill O’Reilly.

Some of the very same financial institutions that participated in the housing market crash of 2008 (when credit default swaps were the rage), are now directly making billions in profit an the backs of the American public. Even though there is no real shortage of world reserves, unregulated speculators, (and major financial institutions), are cashing in with the shear volume of participation. To make matters even worse, lobbyist for these banks and profiteers are providing “equitable” campaign contributions to your United States Representatives to look the other way.

Reading that analysis, which draws heavily on opinion from Daniel Dicker, author of Oil’s Endless Bid: Taming The Price of Oil To Secure Our Economy and a Senior Contributor to the online financial site The Street, seems to make sense, when it’s combined with another analysis included, this from Charles Wallace at Daily Finance. Wallace also cites Dicker on this item:

Dicker, who has spent nearly three decades in the oil market, has a profoundly disturbing explanation of why the price of oil, and the gasoline that comes from the crude product, has risen so dramatically in recent months. It turns out, Dicker says, that the price has nothing to do with supply and demand for oil. It’s the financial market for oil, filled with both professional speculators and amateur investors betting on poorly understood oil exchange-traded funds, who have ratcheted up the price of gas to such sky high levels.

“There is no supply issue going on here – what you have is the perception of the possibility of a supply issue,” Dicker says. “A whole bunch of people are pouring money into an oil market trying to take advantage of what they perceive to be a real risk in supply. It’s a marketplace that I argue should not be allowed to be wagered on like a stock or bond.”

Speculators are like gamblers who go to Las Vegas and bet on a major sporting event like the Super Bowl. The more money bet on one of the teams involved, the more the line changes. For example, the opening line on Super Bowl XL favored Green Bay by 2. As more money was wagered on the Packers, that line increased to 2½ points. If more money had been wagered on Pittsburgh, that line would have gone down.

Likewise, speculators are betting that oil and gas prices will go up. That’s a Duhhhhhhhhhhhhh! bet based on the following known factors:

• The United States has drastically and deliberately reduced domestic oil production. No new drilling leases are being issued, and the Obama Regime refuses to allow any access to new sources of domestic oil, such as ANWR.
• Thanks to QE2, the Federal Reserve System has monetarized more of the national debt by increasing the amount of money into the system, and a QE3 is being talked about, which will even further de-value the dollar.
• The Regime is on record as saying it favors gas prices at European levels of $8 a gallon or more. Dear Leader Himself has said that energy prices must necessarily skyrocket.

Which way would you bet?

None of this factors in the approaching Atlantic hurricane season. One or two disastrous Gulf hurricanes and the sky might be the limit for gas prices:

“All we have to have is a couple badly placed hurricanes which could constrain some of the refinery output capacity in some key locations,” says Richard Hastings, strategist at Global Hunter Securities in Charlotte, N.C. “If you get weakness in the dollar concurrent with the strong driving season concurrent with the impact of one or two hurricanes in the wrong place, prices could go up in a quasi-exponential manner.”

Back in 2008, when gas prices jumped, we heard the chant of “Drill, baby. drill!” and President Bush granted easier access to offshore drilling to help drive the prices back to normal levels. Right now, the soaring cost of fuel has added an average of $1,000 to the annual costs of an average American household. The perfect storm of soaring fuel and food prices is hitting Americans hard:

The combination of rising gasoline prices and the steepest increase in the cost of food in a generation is threatening to push the US economy into a recession, according to Craig Johnson, president of Customer Growth Partners.

Johnson looks at the percentage of income consumers are spending on gasoline and food as a way of gauging how consumers will fare when energy prices spike.

With gas prices now standing at about $3.90 a gallon, energy costs have now passed 6 percent of spending—a level that Johnson says is a “tipping point” for consumers.

“Energy is not quite as essential as food and water, but is a necessity in today’s economy, and when gasoline costs more than bottled water—like now—then it takes a huge bite out of disposable spending,” he said, in a research note.

Of the six US recessions since 1970, all but the “9-11 year 2001 recession” have been linked to—of not triggered by—energy prices that crossed the 6 percent of personal consumption expenditures, he said. (During the shallow 2001 recession, energy prices had risen to about 5 percent of spending, which is higher than the long-term 4 percent share.)

What may make matters worse this time around, is there has been a steep increase in food prices that occurred as well. In other recent recessions food costs were benign, at between 7.5 percent and 7.8 percent of spending.

This year food prices have climbed 6.5 percent since the beginning of early January, according to Consumer Growth Partners.

“The combined increase in the necessities of food and energy creates a harsh double whammy for already stressed consumers,” Johnson said. The last time this happened was in the recession that lasted from 1973 to 1975.

That’s presuming the most recent recession ever really ended. More like a double-dip recession, with the second dip to hit during the 2012 campaign season. And the campaign commercials seem to write themselves. Confronted by an angry taxpayer in Pennsylvania over the cost of gasoline, The Anointed One smugly told him:

If you’re complaining about the price of gas and you’re only getting 8 miles per gallon… you might want to think about a trade-in.

Of course, that’s on top of His idiotic comments from the 2008 campaign in which he told Americans to get tune-ups and make sure their tires were properly inflated. Brilliant quotes such as:

Making sure your tires are properly inflated is a simple thing.  But could we save all the oil that they’re talking about getting off drilling, if everybody was just inflating their tires?  And getting regular tune-ups?   You’d actually save just as much.

Or this gem:

We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees all the time, and then just expect that other countries are going to say OK.

Obama’s answer is the Chevy Volt from Government Motors. A little electric putt-putt car than can travel 40 miles before it has to be recharged. A government solution to a real-world problem. In other words, another FAIL. The technology just isn’t there currently for a vehicle not powered by the internal combustion engine. What’s out there isn’t attractive to consumers from the point of price as well as comfort and convenience. Not saying it will never be the case — American ingenuity, when unleashed from government constraints, can solve anything and the eventual solution will be technology driven — but it isn’t the case now and won’t be for the foreseeable future.

By the way, for the record, the average price of a gallon of gas is more than twice what it was on Transfiguration Day in January 2009.

How’s that Hope and Change working out for ya?

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