Are you willing to 6 dollars for a gallon of gas!

**jiminnm** · February-20-12, 10:16 PM

If gas reaches $6/gallon, Obama will declare that $6 gas is unhealthy for Americans.. As a result, the Obama administration will require Americans to purchase insurance against high cost gasoline. Some Americans will cheer, but others will protest. Obama will then withdraw that requirement and require that insurers provide to all Americans, at no direct cost, the minimum amount of gasoline required to restore American health that would otherwise be lost to high cost gasoline.

**oladub** · February-21-12, 01:39 AM

Originally Posted by mjs

Oladub, is your chart inflation adjusted?

http://www.bls.gov/data/inflation_calculator.htm

I doubt that it is but using government inflation statistics. the inflation from 2006-2012 is about 12.43%

**rb336** · February-21-12, 11:10 AM

Originally Posted by oladub

http://www.bls.gov/data/inflation_calculator.htm

I doubt that it is but using government inflation statistics. the inflation from 2006-2012 is about 12.43%

For a more thorough and accurate look at inflation than you will get from the calculator which isn't wrong, just simplistic), see http://inflationdata.com/.

the mean of annual inflation in 1990-1999 is 3%, 2000-2009 is 2.56%. for the current decade it is 1.83%. those are not bad numbers at all and a far cry from the highs of the 70s [[7.06%) and the 80s [[5.51%). the cumulative inflation from 1976-1982 is 69.6%

**Det_ard** · February-21-12, 04:16 PM

Originally Posted by rb336

The big drop, of course, came during the Bush years, reaching a low in 2008. it has been up and down since, currently trending up, and international investors view it more positively than other currencies. If you were to graph low interest rates over the same period, guess what you would find! ZERO correlation. it does NOT " parallel the Fed's decrease in interest rates to near zero"

You're right in what you say, and my point was poorly made.

I was alluding to the near zero rate since '09. Of course, the value of the US dollar has varied up and down since then as the world economies lurch in and out of crisis but my point, poorly made, was that low US interest rates depress the value of the dollar [[which makes oil more expensive for US consumers).

The weakness of the US dollar usually gets ignored in discussions about gas/oil prices which is unfortunate since it's such a large factor.

**rb336** · February-21-12, 05:18 PM

Originally Posted by Det_ard

The weakness of the US dollar usually gets ignored in discussions about gas/oil prices which is unfortunate since it's such a large factor.

Really? it's usually mentioned hand-in-hand and quickly dismissed as the real culprits - MUCH higher global demand and speculators - come to the fore

**Jimaz** · February-21-12, 06:07 PM

FWIW, I just received the following warning from DetroitGasPrices.com:

Warning! Gasoline wholesale prices have risen sharply in the last 48 hours. Since late last week, the price has risen nearly 40c/gal, meaning prices are ripe for a hike in the next 48 hours! We expect prices to rise to $3.59-$3.75 in Detroit. We estimate the odds at 60%.

Fill 'er up!

**Crumbled_pavement** · February-21-12, 11:13 PM

$6 a gallon gas, here we come!

**lpg** · February-22-12, 04:17 PM

I saw on one of the financial channels that the oil companies are also exporting gasoline. We drive less, export the product to keep prices high.

**rb336** · February-22-12, 04:32 PM

that is EXACTLY what the keystone pipeline is about -- sending Canadian oil to the rest of the world

**old guy** · February-22-12, 05:50 PM

We don't even use tar sand oil in this country. We keep hearing the threat that if we don't build the pipeline, they'll just send it across Canada to the west coast and off to China. The reason they're trying to ship it across the U.S. is because the Canadians said no to running it across their country to the west coast, which is closer.
We were the second choice.

**Ltdave** · February-23-12, 12:43 PM

Gas was $4.22 a gallon yesterday when I filled up in santa rosa ca......

87 octane in case you're curious......

**rb336** · February-23-12, 01:14 PM

Originally Posted by old guy

We don't even use tar sand oil in this country. We keep hearing the threat that if we don't build the pipeline, they'll just send it across Canada to the west coast and off to China. The reason they're trying to ship it across the U.S. is because the Canadians said no to running it across their country to the west coast, which is closer.
We were the second choice.

The cost of building a pipeline across some of the most rugged territory of the Canadian Rockies would be significant, even if they could get the rights to do so from First Nation groups that control the easiest routes. Having to pump the oil over those heights would also be an issue. If they want to bring the oil to the US for use instead of for export, they could build a shorter pipeline to numerous US refineries - Marathon's newer Detroit facilities are capable of handling the low-quality crude the tar sands produce, as are those in Joliet and Porter, IN.

**old guy** · February-23-12, 01:38 PM

Originally Posted by rb336

The cost of building a pipeline across some of the most rugged territory of the Canadian Rockies would be significant, even if they could get the rights to do so from First Nation groups that control the easiest routes. Having to pump the oil over those heights would also be an issue. If they want to bring the oil to the US for use instead of for export, they could build a shorter pipeline to numerous US refineries - Marathon's newer Detroit facilities are capable of handling the low-quality crude the tar sands produce, as are those in Joliet and Porter, IN.

They were asked to sign a statement saying the oil would be used in the U.S. They refused to do so.
After the debacle with the pipeline crossing the Kalamazoo River, I don't know why Michigan would want them adding more pipelines. This would be a high pressure pipeline so it can move the sludge like oil. When they break, you get a real mess.

**rb336** · February-23-12, 03:21 PM

I don't want it in my back yard. sure they will say they will conduct regular maint. but that's what they said in Alaska as well -- yet they didn't perform the required pigging half as often as they were contractually obliged to do.

**poobert** · February-23-12, 03:53 PM

Yes I am willing to 6 dollars for a gallon of gas are you! Where is the Straits of Hummuz anyway!

**oladub** · February-23-12, 06:08 PM

There are two proposed pipelines to the west coast should Keystone fall through. Enbridge, Canada's second largest pipeline company wants to run it from Bruderheim Alberta to Kitimat BC. Do a Google maps directions make to get an idea of that route assuming it follows existing roads through river valleys. The other is Kinder Morgan's proposed route along it's existing right of way and pipeline to Vancouver. KM is a US company with superb management.

**rb336** · February-23-12, 10:03 PM

I'd bet on KM, but it is by no means a sure thing. First Nations and BC both have to approve it, and both have expressed reservations

**oladub** · February-23-12, 11:15 PM

Gasoline Prices Are Not Rising, the Dollar Is Falling

Were gold still used for money, the price of oil would now be below it's average historical price according to this article. However, it is getting more expensive relative to the federal reserve notes we now use for money. Three dimes back in 1964 would buy one gallon of gasoline. Those three dimes contained .217 troy ounces of silver worth $7.68 or two gallons of gasoline today.

**wolverine** · February-24-12, 01:43 AM

I don't drive but it will no doubt impact the cost of food. And when I do rent a car for vacations or long trips I'll need to allocate more money for gas. I'm imagining the cost if a cab will go up too. No matter what you do to avoid gasoline costs, it will always impact you in some way.

**rb336** · February-24-12, 02:06 PM

Originally Posted by oladub

Gasoline Prices Are Not Rising, the Dollar Is Falling

Were gold still used for money, the price of oil would now be below it's average historical price according to this article. However, it is getting more expensive relative to the federal reserve notes we now use for money. Three dimes back in 1964 would buy one gallon of gasoline. Those three dimes contained .217 troy ounces of silver worth $7.68 or two gallons of gasoline today.

One more time - this notion has been debunked in numerous places. FYI, the dollar has been trending HIGHER during this current increase:

http://www.forexcrunch.com/category/...llar-forecast/

QED!!!!

**oladub** · February-24-12, 02:53 PM

Originally Posted by rb336

One more time - this notion has been debunked in numerous places. FYI, the dollar has been trending HIGHER during this current increase:

http://www.forexcrunch.com/category/...llar-forecast/

QED!!!!

The dollar is up against other currencies over the last week but down for the day the last I noticed. So what? How does that contradict anything you are responding to? Your article compares the US fiat dollar against other fiat currencies. The one I submitted compared the fiat dollar with gold. Would you like me to pay you 10% more than the face value of 1964 and earlier US dimes, quarters, half-dollars and dollars? If you are correct, this is a money making opportunity for you. Here is the price of gold, in dollars, over the last sixty days. Relative to the link I provided, it looks like the dollar won't buy as much. Look for the 60 day graph.

au0060lns.gif or http://www.kitco.com/charts/livegold.html

In the last two months West Texas oil has gone up from about $99 to $109; about 10%.
The price of gold has gone up from about $1,600 to $1780; about 11%.

If US currency were still backed by gold, the price of oil would have declined 1% in the last two months.

**ghettopalmetto** · February-24-12, 02:58 PM

Originally Posted by oladub

In the last two months West Texas oil has gone up from about $99 to $109; about 10%.
The price of gold has gone up from about $1,600 to $1780; about 11%.

If US currency were still backed by gold, the price of oil would have declined 1% in the last two months.

Are you sure about that?

Seems to me that, given a fixed amount of gold, if the value of that fixed supply increases, then the result is an INCREASE IN THE MONEY SUPPLY that you so dread. In other words, for every Troy ounce of gold, you now have an extra $180 available to spend.

An increase in money supply would tend to drive oil prices upward, would it not? Oh, but hey: 10%-11% = -1%, which is so much easier and doesn't require thinking.

You're constantly lobbying for something you don't even understand!

**mjs** · February-24-12, 03:25 PM

Originally Posted by old guy

They were asked to sign a statement saying the oil would be used in the U.S. They refused to do so.
After the debacle with the pipeline crossing the Kalamazoo River, I don't know why Michigan would want them adding more pipelines. This would be a high pressure pipeline so it can move the sludge like oil. When they break, you get a real mess.

I have never heard a clear answer from the news or White House on why the Department of State rejected the pipeline. Was this it?

It makes more sense than the "not enough time to review" answer Republicans on C-SPAN were claiming the White House had given. That Republican press conference had said lack of review time was an outrageous claim considering they had 18 months and missed two final report deadlines by nearly a year when four months has been the typical period for past reviews of oil piplines.

I found this graph and article on inflation adjusted gasoline. Unfortunately, the chart hasn't been updated since mid-June. However, the second link has inflation adjusted oil prices and was updated end of January. There's some really educational articles on this site about inflation, interest rates, housing prices, education, etc that explains cause and effect.

http://inflationdata.com/inflation/i..._inflation.asp
http://inflationdata.com/Inflation/I...ices_Chart.asp

**oladub** · February-24-12, 03:35 PM

Originally Posted by ghettopalmetto

Are you sure about that?

Seems to me that, given a fixed amount of gold, if the value of that fixed supply increases, then the result is an INCREASE IN THE MONEY SUPPLY that you so dread. In other words, for every Troy ounce of gold, you now have an extra $180 available to spend.

An increase in money supply would tend to drive oil prices upward, would it not? Oh, but hey: 10%-11% = -1%, which is so much easier and doesn't require thinking.

You're constantly lobbying for something you don't even understand!

A partial audit revealed that the Federal Reserve secretly printed and distributed $16T over the last few years. That is an increase of the money supply. If you think finding gold is easy, buy a pick and shovel and have a go at it. It is probably easier just to tax your neighbor to get his stuff. There is an increase of the gold supply but nothing compared with the increase in our money supply. Every fiat currency ever created eventually becomes worthless unlike the gold you will dig up. China is about to pass India as the largest importer of gold even though China has expanded its own gold production.

My numbers, unlike your comments, were based on statistics. We, however are veering off track. I don't even think that the biggest cause for the very recent increase in gas prices is the devaluation of the dollar. That is more a long term problem. My guess is that the biggest reason for the short term increase in the price of oil, in dollars, is that speculators have to weigh in the possibility of some sort of conflict with Iraq and losing access to 1/5 of the world's oil supply.

**ghettopalmetto** · February-24-12, 03:40 PM

Originally Posted by oladub

A partial audit revealed that the Federal Reserve secretly printed and distributed $16T over the last few years. That is an increase of the money supply.

And you and Ron Paul are the only people in the world who are either shocked or worried by this. Welcome to Planet Earth.

My numbers, unlike your comments, were based on statistics.

But your "interpretation" is completely bunk, for the reasons I stated. Unfortunately, organisms as complex as global oil markets and monetary policy do not subscribe to the Glenn Beck School of Oversimplified Economic Analysis.

It's introductory macroeconomics. Take a course at your community college, since you clearly have plenty of free time to worry about this stuff.

My guess is that the biggest reason for the short term increase in the price of oil, in dollars, is that speculators have to weigh in the possibility of some sort of conflict with Iraq and losing access to 1/5 of the world's oil supply.

Or, Iran. But hey, they're the same, right?