It took me a few days since I put it on my must read list, but I finally had a chance to read Robert Murphy’s study debunking the often-repeated idea that speculators are to blame for oil prices.
I can’t find the link now, but I also recently read a article comparing commodities that have futures markets to those that don’t. Not surprisingly, those with futures markets were less volatile since hedging allows for consumers (particularly large consumers) to stockpile when prices are low, decreasing demand when prices are high.
It is striking to me how the issue of inflation is ignored when it comes to the soaring fuel prices. When the price of oil is measured in gold, it has remained incredibly stable, as shown by the chart at right (where the price of oil in gold is in purple, the price in Dollars is blue and the price in Euros is red).
Turns out that constantly devaluing the dollar does matter. And as oil producers move away from the petrodollar, it will likely become worse.
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This is what I posted on RonPaulForums.com on 5-5-08 concerning this graph.
“Most peoples eyes glaze over when you start to talk about the Fed and monetary policy, but everyone is interested in oil prices.
If you understand this graph you can SHOW almost anyone why we need a stable currency and why the Fed is EVIL.
“Its the DOLLAR, Stupid!”
The “price” of oil has NOT gone up!
Look at this article and graph.
The price of oil PER OUNCE OF GOLD has not gone up!
It has remained virtually FLAT.
Through Katrina and the war in Iraq and political instability in Nigeria and the Middle East and the closing of oil refineries for “construction”, etc. etc…. during all of this when we were being told that the price of oil was going up for all of these reasons, the TRUE price of oil has remained almost exactly the same!
It is the value of the DOLLAR that has gone DOWN!
Ron Paul has been telling us for years that there is no free lunch with the Federal Reserve and their irresponsible inflation of the fiat dollar (AKA, “Federal Reserve Note”).
Notice that the Euro, which is also a fiat currency, fluctuated in step with the American dollar. It just didn’t lose its value quite as fast. (Their printing presses churning out government-issued counterfeit money weren’t working as fast as ours.)
We need to stop believing the big lies out of Washington that are designed to blind us to the truth.
Our REAL wealth, the value of our savings, the very dollar itself,’ is being systematically drained through the Federal Reserve’s power to print money at will!
THIS is what we should be talking about.
THIS is what we should be forwarding to our friends and families.
THIS is the greatest threat to our freedom and national sovereignty.
Wake up, America!”
To appreciate where gas and oil prices are headed, see this presentation prepared by Colorado State Mining
http://www.geosurvey.state.co.us/portals/0/China%20India%20Web%20FINAL%20POST.ppt
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