Gasoline prices hit below $2/gallon at my local gas stations this weekend. here are my thoughts, since the national media is making a total hash of this.
1. Why is this happening? Supply and Demand. That is all.
2. Lower demand is due to a global depression. Less stuff being manufactured leads to less needing to be transported. Fewer employees driving to work. Fewer families taking long car vacations.
3. Higher supply caused by Fracking and lack of demand.
4. When prices fall, people who sell take it in the shorts and people who buy get a bargain. I shouldn’t have to say this, but it seems like a total mystery at CNN/FOX/and MSNBC. And oddly enough, the exact opposite is true when prices are high. Who would have thought? So, in each case, for each commodity, whenever news media or politicians tell you that the “price is too high”, what they mean is, “We decided that the buyers should have more power than the sellers”.
5. There is no way in hell that Obama has some master plan to lower oil prices in cooperation with the Saudis to undermine Putin. Pure fantasy. He doesn’t think that far ahead and he couldn’t care less about Russia. In fact, Obama has been working to accomplish the exact opposite. It is his stated intention to keep gasoline and all other energy prices abnormally high and establish $4/gallon as the new normal in order to favor his friends in the Carbon trade scam as well as his donors in the Environmental extreemist camps.
6. There is no way in Hell that OPEC has any control over oil prices and is lowering the prices to drive American fracking out of business. It doesn’t work that way. Cartels don’t work. They invariably cheat and each member tries to maximize their own revenues at the expense of other members. OPEC has been a shining example of this since the 70’s. The Saudis and the other member states are all pumping as fast as they can instead of restricting the flow because they are all hurting as SELLERS of oil and their own bottom lines are suffering. They all ned the revenues to support their vast welfare states.
7. You can’t stop the fracking by driving it out of the market. When the price goes back up, as eventually it will, then the frackers come back. The technology doesn’t get forgotten. It gets improved on. And it got invented in the first place without a dime of government investment and without even a single paragraph in a National Energy Strategy telling it how to get done or developing infrastructure.
8. Obama should not take credit for falling gas prices. He has done everything possible to impede fracking (increase of supply). To the extent that he is responsible for the global depression, he can take full credit.
9. Our Republican congress wants to increase the gas tax because, the price is so low. Funny, I don’t remembering them voting to lower the gas tax back when it first rose above $2.
10. That whole buyers and sellers thing also applies to all the other commodities people like and the government Vizirs interfering with the market: Milk, peanuts, sugar, Ethanol, and Health Care.
11. This is also evidence that there is no bunch of oil company fat cats colluding about oil prices so BUUUUSH and haliburton can get rich. If the fat cats could collude on the price of gasoline, there is no reason why they wouldn’t keep it up around $3.50/gallon and pocket the profits. The falling price reflects competition in the marketplace working. Thus, we let prices rise and fall according to market pressures and we get a variety of goods on the market at good stabile qantities at prices the market will bear.
This is all basic economics. The ignorance of Modern journalists, even economic analysts, is astonishing. They really graduate from college knowing nothing.