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Permlink Replies: 10 - Last Post: Mar 19, 2012 9:50 AM Last Post By: Turtletoes2
Turtletoes2


Posts: 4,289
Blame World Market not Obama
Posted: Mar 17, 2012 11:13 AM
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Seems the Republicans are getting set to blame Obama for the high gas prices. Absurd. Most of them know better but it's an easy way to flummox those who haven't looked into the complexities of the problem.

Almost the minute oil is pumped from the ground anywhere it is listed on the world market.
Blame China, India, Brazil, and other nations who are adding new highways to accommodate the cars that are being bought in an effort to have a middle class.

The U.S. can drill all it wants but it's hard to find anybody who expects greater domestic production to move gas prices by more than, say, two percentage points in the next six months. The problem is that the market for oil is global and U.S. supply is too small to make an impact.

http://www.theatlantic.com/business/archive/2011/04/what-determines-the-price-of-gas-a-visual-guide/237968/

TheHawg

Posts: 1,614
Re: Blame World Market not Obama
Posted: Mar 18, 2012 7:46 PM   in response to: Turtletoes2 in response to: Turtletoes2
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One would think lessons would be learned:

1. It's very easy to blame those in power positions when one is not in said position.

2. When one ascends to such a power position and the same thing happens again, payback is a b*tch.

http://www.usatoday.com/news/washington/2006-04-22-dems-gas-prices_x.htm

http://money.cnn.com/2004/05/18/news/economy/gas_politics/

http://www.washingtontimes.com/news/2006/apr/25/20060425-123202-9285r/

http://cnsnews.com/news/article/pelosi-blamed-oil-men-white-house-gas-prices-08-now-who-s-blame

and blaming, of course is a two-way street in our society:

http://abcnews.go.com/Politics/PainAtThePump/story?id=5197676&page=1

That being said, Dems had a wonderful opportunity to go after those speculators who caused much of the run up in oil and gas prices in 2008. But they did nothing. Congress could enact something right now to deal with the situation, but again, we see nothing happening on the speculation front. Do you really think Wall Street isn't in the pockets of both sides of the aisle?
Sean


Posts: 6,519
Re: Blame World Market not Obama
Posted: Mar 19, 2012 8:31 AM   in response to: TheHawg in response to: TheHawg
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Actually, the Dodd-Frank law authorized the Commodity Futures Trading Commission to issue rules on oil speculation. Which they did, last year. However, implementation of said rules is bring held up in part by lawsuits from two industry trade groups. If those suits get tossed out, the rules could go into place in June.

So, the Democrats actually did do something, Hawg.

Edited by: Sean on Mar 19, 2012 8:31 AM
TheHawg

Posts: 1,614
Re: Blame World Market not Obama
Posted: Mar 19, 2012 9:14 AM   in response to: Sean in response to: Sean
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Good to know. Obviously, I didn't. That part of the law escaped most headlines.
Turtletoes2


Posts: 4,289
Re: Blame World Market not Obama
Posted: Mar 19, 2012 9:50 AM   in response to: Sean in response to: Sean
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I'm going to put that writ big:

Actually, the Dodd-Frank law authorized the Commodity Futures Trading Commission to issue rules on oil speculation. Which they did, last year. However, implementation of said rules is bring held up in part by lawsuits from two industry trade groups. If those suits get tossed out, the rules could go into place in June.

So, the Democrats actually did do something,
Turtletoes2


Posts: 4,289
Re: Blame World Market not Obama
Posted: Mar 18, 2012 8:07 PM   in response to: Turtletoes2 in response to: Turtletoes2
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He added that oil companies already have the rights to drill on 68 million acres of American soil that aren't currently under development.

Yep, I think both parties are guilty of accepting funds {payoffs} BUT:

If we drilled our brains out and it goes on the world market, what's the difference ? It's a catch 22 no matter what you do.
TheHawg

Posts: 1,614
Re: Blame World Market not Obama
Posted: Mar 18, 2012 8:50 PM   in response to: Turtletoes2 in response to: Turtletoes2
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Actually, it does matter, and it's not a catch 22. We've got the potential to make oil come out of our ears right now, and we could produce more gas to make prices go down, but the oil companies won't have any of it because they are raking in the profits.

They are acutally shipping gas out of the U.S. right now because there isn't a high enough demand from U.S. customers. They can artificially keep prices high that way.

And, to add insult to injury, they are mothballing plants to lessen refining capacity to once again artifically decrease supply and raise demand.

All just to hit us squarely in the backside.

And what do our wonderful folks up in D.C. do? Blame one another, sit on their hands, and talk about either free markets or alternative energy, neither of which exists in a manner to ease what is happening.

My personal view of what caused the Great Recession was the spike in energy prices which led to people defaulting on homes which caused the crash. All I can say is: here we go again.

(And our congress folks did nothing to change what caused the above in the first place. Failure to learn from history?)
Gramps


Posts: 14,442
Re: Blame World Market not Obama
Posted: Mar 18, 2012 9:38 PM   in response to: TheHawg in response to: TheHawg
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While high fuel prices contributed to the great recession, the actual cause was many of the sub prime loans were five year adjustables, in which the loans started out below market rates but after five years would adjust to the higher market rate. People that started out with subprimes were hoping they could find better jobs or be able to refinance before the five year limit happened. And the rest is history.

However, I would agree we need to find a mechanism to curb speculation.

I heard an interesting report the other day that pointed out while the Republicans claim they have a plan to bring down fuel prices, their saber rattling that we need to take military action against Iran is actually increasing our fuel prices by $0.50.
TheHawg

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Re: Blame World Market not Obama
Posted: Mar 19, 2012 9:18 AM   in response to: Gramps in response to: Gramps
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I'm not sold on that as the cause. A factor: sure, but my guess is many folks would have still been able to afford those mortgages had they had the extra money in their pockets and weren't having to forfeit an arm and a leg for fuel and electricity.
Turtletoes2


Posts: 4,289
Re: Blame World Market not Obama
Posted: Mar 19, 2012 3:22 AM   in response to: TheHawg in response to: TheHawg
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I'm not a fan of big oil either. The article I posted claims if we "drilled baby drilled", it would make little difference because we are part of the world market. The dye is cast so to speak.

According to the article :

." The Drill, Drill, Drill Argument. The U.S. can drill all it wants but it's hard to find anybody who expects greater domestic production to move gas prices by more than, say, two percentage points in the next six months. The problem is that the market for oil is global and U.S. supply is too small to make an impact."

Other factors are:

The Supply and Demand Factor. Fuel demand from China, India and Brazil -- three countries with a combined population of 2.7 billion -- is the chief factor behind rising prices. China's fuel demand increased 12 percent in 2010. Meanwhile Saudi oil production has fallen,

The Middle East. Revolutions swept the Middle East, then Libya descended into civil war and its oil production fell by more than 50%. Ongoing uncertainty about the region continues to push up prices.

The weak dollar.as the dollar loses value, oil becomes more expensive.

The Summer. . More people using gas on vacations

The Speculation Factor. Oil speculation -- investors betting up the price of oil in the futures market. But this isn't considered a deciding factor.

And again as stated The drill , drill , drill argument would be of little help and rising demand {China, India, Brazil} is the chief factor among others.

Turtletoes2


Posts: 4,289
Re: Blame World Market not Obama
Posted: Mar 19, 2012 8:46 AM   in response to: TheHawg in response to: TheHawg
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And, to add insult to injury, they are mothballing plants to lessen refining capacity to once again artifically decrease supply and raise demand.

My understanding is the plants they have would not be able to handle what they would be able to produce. That means building new plants which is cost prohibitive but if they got those going then the middle east would relax their hold and produce more which would be more competition which in turn would take effect on the world market.

Talk about a vicious cycle.