The Big Lie

Hi Everyone,

Well it's happening again and we all are powerless to stop it and its ravaging effects it has on all of our lives. If it continues, which all the analysts seems to predict that it will, it will have major effects on our economy. What am I talking about?............. the increases in the price of crude oil which raises the price of gasoline.

I blogged about this back in March 2009 and now we are in the same sinking boat when it comes to trying to control the price of gas. Did you know that Iran supplies the United States with 2.5% of our oil? Yes it is true. Even though we shouldn't be buying anything from them, but that is another topic for another day. Now with all the talk about Iran, nuclear weapons and their threats to shut down the Straits of Hormuz, the price of gasoline is on a very real path to top $5.00 per gallon very soon.

There is no shortage of oil, no matter what you hear. So what are the real reasons for the surge in prices? The first three reasons are: speculators, speculators and more speculators. Speculators are the main reason why oil prices are on the rise. Speculators love to hear about any bad news coming out of the middle east. The more bad news, the higher they speculate and consequently, the more money they make. As I have said numerous times, common sense dictates that speculating should be banned when it comes to energy or food. What ever happened to economics 101 and let supply and demand determine the price of oil and food and not a bunch of number crunchers thriving on betting on oil and food prices rising. Just imagine how much lower oil and food prices would be without having speculators involved?

Don't believe what you read or hear; neither political party has any real viable way of lowering oil prices. More drilling doesn't solve the problem in the short run. It takes over 5 years to bring a new off shore oil rig to production. But then shouldn't we be trying to become less dependant on oil period? BP's oil rig explosion in the Gulf of Mexico in April 2010, demonstrated that oil companies and their subcontractors will take whatever shortcuts they think they can get away with. Take shortcuts and disasters will absolutely happen. Do we need any more proof than what happened in April 2010?! Off shore drilling must be done in a way that absolutely protects both people and the environment. But at the same time, we should be pushing harder and much faster for alternative fuels and energy production.

Til next week.

Peter