Oil at $107 barrel

[Sauron]

Wow.

Part of this is the activity of speculators, trying to forecast summer consumption. And another part is just people fleeing a weak dollar and trying to put their wealth into a more stable, appreciating asset.

But the most obvious part is the fact that the dollar has fallen in value. So even if consumption and production were constant, we'd still be paying more $$ per barrel. Why? Because Bush's mismanagement of the economy means that the dollar is simply worth less. So it takes more dollars to buy the same barrel of oil.

Don't blame OPEC -- blame Bush, the bad economy, the two wars we're fighting, and borrowing billions from the Chinese.

[1Samuel8]

The price of oil is rising to meet its more realistic cost. For years, it has been artificially low.

The US administration maintained a policy of strong-arming oil-producing nations into selling oil ONLY in the dollar. This forced demand for the dollar and thus, the value of the dollar was artificially high. [Countries that refused to sell only in the dollar were generally threatened with attack if not attacked directly.] The American petro-dollar-propping military strategy is no longer working.


---

The value of the dollar is influenced by other aspects of monetary policy too. The current housing crisis is a result of the Fed increasing the money supply too much, giving too much money to the banks and the banks offer cheaper and cheaper loans.

[Stormlight]

Originally Posted by 1Samuel8

The value of the dollar is influenced by other aspects of monetary policy too. The current housing crisis is a result of the Fed increasing the money supply too much, giving too much money to the banks and the banks offer cheaper and cheaper loans.

The housing crisis is due to a number of factors, but not that the fed gave too much money to the banks: extremely low interest rates, lax or non-existing lending standards, greed to name a few.

I've got to fill my tank today, too. Yay.

So glad I drive a small car. I think I'll laugh if one of the neighbourhood idiots (read: Humvee drivers in an urban setting) is at an adjacent pump.

[1Samuel8]

Originally Posted by Stormlight

extremely low interest rates, lax or non-existing lending standards,

Those are the same as giving money away to the banks.

[Stormlight]

Of course they are.

[Adam]

Originally Posted by Uthgar the Brazen

So glad I drive a small car. I think I'll laugh if one of the neighbourhood idiots (read: Humvee drivers in an urban setting) is at an adjacent pump.

You might be able to fill your tank for half what I pay, but my Jeep and I can drive over you if I'm stuck behind you in traffic!

Originally Posted by Adam

You might be able to fill your tank for half what I pay, but my Jeep and I can drive over you if I'm stuck behind you in traffic!

And promptly get squashed by one of the Stupid Urban Vehicles that was speeding to make sure it got a car-length ahead by whipping into my reaction zone.

[Smilin]

Just filled my tank up at lunch today...

Cost me $35.00.

Gasoline is $3.50 a gallon here now...

[Caligulette]

Pff. I filled mine at about the same price. Lowest grade is in the 3.50 range, it only goes up from there.

[Smilin]

Reason I was sighing over the whole matter is that a little over a couple years ago what I could do for $20.00 it now takes almost double that...

I've had my car about 6 years. When I first got it, a full fill-up cost met about $12-$13.

It's at least $25 on average now. Fortunately, I'm a homebody and don't drive a whole heck of a lot.

[Smilin]

Yarrrr...

Something to be said about being a WoW addict, eh?

How much fucking higher can gasoline prices go before our whole economy collapses?

[Caligulette]

Originally Posted by Smilin

Reason I was sighing over the whole matter is that a little over a couple years ago what I could do for $20.00 it now takes almost double that...

No, I know- I used to have money left over from $20/week allowance on gas. Now I bring $40 with me just in case.

Let's not even go into groceries and the cost thereof.

I've certainly noticed the cascade effect.

And I'm a LOTRO/EQ2 junkie now.

[Smilin]

Fuel prices drive retail prices. Almost everything you purchase in the supermarket/dollar stores/any retail business is brought to the stores by truckers.

When the cost of fuel goes up, the cost of hauling those retail goods goes up and the cost is ultimately passed on to the consumers.

Why do I feel like this is the beginning of the ending for civilization as we know it?

[Caligulette]

Because it is.

[Smilin]

* Smilin sings that REM song stuck in his head..

It's the end of the world as we know it....

And I feel like shit. Stupid cold.

[Sock Puppet]

Well, thanks for sharing, Smilin.

[Caligulette]

Could be worse, could have been Stand....

[Sock Puppet]

Hmmm. REM song, or mental image of goatse ... Meh, toss-up.

[Plant Woman]

Sheesh, I filled up yesterday and it was 50 dollars. My gas tank is not that big.

* Plant Woman needs to move where gas is cheaper.

[yguy]

Prices are a function of supply and demand. Do any of you really believe the US is lacking in crude oil reserves?

[Smilin]

Exactly...

And the demand has been down since last year...

The United States consumed, on average, 2% less than they have in previous years...

sooooo..why in the hell is prices continuing to sky rocket?