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Obama responsible for bringing $5 per gallon gasoline

Discussion in 'BBS Hangout: Debate & Discussion' started by bigtexxx, Feb 15, 2012.

  1. Cohete Rojo

    Cohete Rojo Member

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    War it is? Iran announces rumored plan to sell oil for gold. Iran does a lot of business with India through Turkish banks, and Japanese and Chinese ship insurers are being affected by EU sanctions as well. Is this a hedg against sanctions? Could it lead to further increase in oil gold prices, yes, no?

     
  2. pgabriel

    pgabriel Educated Negro

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    latest oil inventory report

     
  3. pgabriel

    pgabriel Educated Negro

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    oil prices are in their third straight day of decline after rising everyday since valentine's day. any informed voter knows that the problem isn't us production so any criticism on obama on this subject is ignorant.

    [/thread]
     
  4. Classic

    Classic Member

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    $7 /gallon predictions from possible FED actions? Scare tactics or legit concern from some analysts at BAC?

     
  5. SamFisher

    SamFisher Member

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    It's ironic that gold standard enthusiasts profess to love free markets but are generally opposed to allowing currency markets to work on their own and instead want to strap them to shiny pieces of rock with very little inherent value.
     
  6. bigtexxx

    bigtexxx Member

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    not so fast my friend

    Does Obama have an impact on the dollar's value? Especially his budget that had such a huge deficit?
     
  7. Dubious

    Dubious Member

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    No. I googled this in under a second:

    Just 33% of the budget is Discretionary.

    Military spending, which is two-thirds of the entire Discretionary budget.

    Spending on defense defends the dollar so other than that it's pretty much statistically negligible. I think the money Congress is creating now is helping, replacing the trillions that went up in smoke in the mortgage meltdown. (We should tax the banks profits to get that back, from here and overseas) I don't think it's very inflationary. It could be a net wash if it saves the US economy. That would have to be considered cost effective.

    The President absolutely should be jawboning the Saudi's to open up the taps. And Kuwait better get every drop they can out now.

    Screw OPEC, this Iran stuff is serious.
     
  8. Cohete Rojo

    Cohete Rojo Member

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    Mandatory spending:

    • $773 billion - Social Security
    • $733 billion - Medicar and Medicaid
    • $35 billion - Economic Stimulus
    • $711 billion - Other Mandatory Spending
    • $2.252 trillion - Total

    Discretionary Spending:

    • $450 billion - Non-defense
    • $869 billion - Defense/Security
    • $1.319 trillion - Total

    So where's the pork that's bidding gas prices up?

    http://useconomy.about.com/od/usfederalbudget/p/US-Government-Federal-Budget-FY2012-Summary.htm
    http://en.wikipedia.org/wiki/2012_United_States_federal_budget
     
  9. pgabriel

    pgabriel Educated Negro

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    does obama control the fed?
     
  10. bigtexxx

    bigtexxx Member

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    Complete hypocrisy from the Obama camp

    <iframe width="420" height="315" src="http://www.youtube.com/embed/1oaq2fHiOOY" frameborder="0" allowfullscreen></iframe>
     
  11. Cohete Rojo

    Cohete Rojo Member

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    Since the time that article was published in May 2005, global crude oil and condensate production has risen from 74,279,326 barrels per day (bpd) to 72,660,775 bpd in May 2011...err I mean fallen. Though in November of last year production was at 74,954,460 barrels per day. U.S. production increase in that time span: 300,000 bpd more in November 2011 than in May 2005.


    http://www.eia.gov/cfapps/ipdbproje...d=1&cid=&syid=2005&eyid=2011&freq=M&unit=TBPD
     
    #151 Cohete Rojo, Mar 3, 2012
    Last edited: Mar 3, 2012
  12. MrRoboto

    MrRoboto Member

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    Hey Brahs. I searched for pages to find a response to this post as this brah was very much looking forward to learning from Tex's vast pool of knowledge concerning monetary policy, the price of gasoline, inflation and fiscal policy.

    Did I miss it, brahs??
     
  13. Dubious

    Dubious Member

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    Lets just cut out the middleman brah and go straight to the conservative talking points:

    The Mystery Behind Rising Oil Prices Solved
    http://www.huffingtonpost.com/michael-pento/the-mystery-behind-rising_b_1316035.html?ref=business

    ....... In contrast to what Geithner believes, there are two things he, the Fed and the Obama administration could do today to bring oil prices down below $70 per barrel in less than 30 days. First, is to raise the Fed Funds rate to 1 percent and repeal Bernanke's pledge to keep interest rates at zero until the end of 2014. The second is for the president to proclaim that the U.S. does not support, in any way, a preemptive military attack on Iran. These two simple measures would dramatically strengthen the dollar, backing out at least $25 from the crumbling currency premium and removing the $15 war premium built into the price of oil.......

    ....The main reason why oil prices are rising is the same reason why food and import prices are soaring as well. Paper currencies across the world are losing their purchasing power against real assets that cannot be increased by fiat. Of course, the Pollyannas on Wall Street will tell you that oil is rising because of a rebounding economy. However, the facts are that gasoline demand is down 6 percent YOY, while oil inventories are at a six-month high. If the global economy was indeed recovering why is the demand for gas at the pump falling? In reality, the global economy is very weak and the U.S. is very far removed from a sustainable recovery.


    or it could be:

    Gas Prices Rise For Five Reasons
    http://www.huffingtonpost.com/2012/...sons_n_1314027.html#s748247&title=Also_On_The
     
    #153 Dubious, Mar 4, 2012
    Last edited: Mar 4, 2012
  14. Thinhallen

    Thinhallen Member

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    I haven't read the entirety of this thread, but for your point above, I believe the reason free market enthusiasts like to see currencies tied to gold or any other tangible good is that this keeps the supply side of money from being increased due to whatever rationale happens to be en vogue. A free market has to take into account a myriad of factors. A fiat currency only has to listen to, in our case, one individual playing the part of an omniscient being who can ultimately blame any other market conditions regardless of the outcome and still keep his job.

    As an aside, if banks made it rather easy for the common individual to put their money in any form such as gold rather than dollars, do you think people would still be holding their money in the form of American dollars at this point?
     
  15. bigtexxx

    bigtexxx Member

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    oh you've got to be kidding me.

    that guy had to have been playing dumb

    The way fiscal restraint helps the economy is that we'll need less debt to finance our deficit, which would in turn strengthen the US dollar, which helps mute the increase in the price of oil in dollars.

    I simply do not have the time to instruct others on the fundamentals of this, so that is why I don't respond to ever Tom, Dick and Harry that comes begging for my knowledge.
     
  16. Dubious

    Dubious Member

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    ... which increases the hard asset value of the existing debt especially relative to an artificially controlled currency

    ....which reduces exports, increasing the trade imbalance that reduces the value of the dollar

    ... that reduces cash flow and money creation in a period of recession and tight credit

    ...which promotes consumption over conservation and innovation that weakens the nations position for the future

    .. that promotes reliance imported oil who's tenuous supply threatens catastrophic results if the supply is cut by political upheavals beyond our control

    ...that continues to pollute the planet with CO2 and acid rain

    It's a big algorithm with a lot of interrelated issues, there are no simple solutions.
     
  17. Northside Storm

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    America could also crash Europe's economy and get that same desired effect (say by withholding Fed involvement in Europe, and then accelerating the push of Basel on European banks, making sure key stress points---Soc Gen, BNP Paribas etc. are pushed to the max in the quickest time possible). The USD would strengthen in a risk-off event, US Treasuries would have lower yields as a result of higher demand in a risk environment, and oil would decline as a result of speculators realizing their artificial bubble might not be sustainable with most major economies being unable to sustain economic activity.

    the financial markets work in strange and mysterious ways, many of which have NOTHING to do with the fundamentals.
     
  18. bigtexxx

    bigtexxx Member

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    What is this ridiculous crap? Unrealistic.

    Sorry, but your post contributed no benefit to the overall thread.
     
  19. Northside Storm

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    It is completely true that if the United States followed that course of action, the US would benefit.

    It's a testament to how f**ked up international markets are, and how far they have deviated from fundamentals, and how tricky it is to gauge them.

    Of course, a macro-economist might point that your solution of reducing the deficit implies another problem---a ballooning current account deficit spurred on by a stronger dollar that buys up even more and more imports, that will eventually have to be financed with a capital account surplus, which will drag out a huge tier of American dollars in the currency markets. Now, if the American dollar (or hell any currency) behaved rationally in these markets, then you would expect to see a steady depreciation. However, this depreciation might be spurred on even further by risk-on activity---in that export-oriented economies that constitute the majority of the world economy will be spurred into motion again. The depreciation could be halted by the austerity measures that slow the American economy so much it drags the world economy down. This in turn could affect the speculative bubble of oil, which may in any turn already be turned down by the fact that America no longer needs to war in Iran, or a new energy source is found, or investors just become sane.

    It could be like the specie flow of old---currency coming in, then flowing out with floating markets. Or it couldn't.

    This is not taking into account a myriad of other factors such as sustainability.

    Basically, your simplistic analysis brings no benefit to the overall thread, and in fact may denigrate it, because it is not, in any way, properly thought out to the degree that a macro assertion should be.
     
  20. Cohete Rojo

    Cohete Rojo Member

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    I guess I can argue that the devaluation of the dollar is good for foreign importers. Their native currency buys more dollars for them to buy food, oil, generators, etc. However, it hurts foreign exporters because the dollars purchase less native currency. They can either increase export prices or they can hedge the risk and buy gold, which is what India's and China's economy and central bank are doing.

    Since the American currency is not gold back and has a huge role in oil and food markets, it can be argued that the Fed is better off making imports like oil and food relatively cheaper for other nations.
     

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