I want to say thank you to the Europeans and President Obama for insuring that all of us will be warmer next winter and driving farther this year. The price of oil is collapsing.
The first sign of an oil collapse was the dropping of the euro. Oil is priced in US dollars; when the dollar goes up, oil goes down, when the dollar goes down, oil goes up. (It’s like a teeter-totter.) You can manipulate the commodity and currency markets by exploiting these relationships. Throw in some phony geopolitical crisis and use the lie of peak oil, and voila, you can control the world’s economy.
The euro is collapsing because of the European debt crisis, a crisis created by Wall Street and European banks. This started a year ago and the euro has fallen from $1.48 to its present $1.22. The reality of the European crisis is so grave that there is little hope of the euro recovering for years.
As all currencies are priced in an interrelated way, movement in one currency affects all of them. When the euro goes down, the dollar has to rise.
Canada’s loonie has risen from 66 cents to par with the U.S. dollar for only one reason; Canada’s economy is based on oil and other raw resources.
When the price of oil rises, so does the loonie. And the dollar drops.
There has been an army of folks who trade currencies whose only reason for being is to short the U.S. dollar, to drive the dollar down to enrich their friends, the commodity traders on the other side of the room. When the dollar goes down, the commodity (oil) goes up.
But the European debt crisis is not a manufactured geopolitical crisis, it’s real. The traders can’t manipulate the euro and they can’t stop it from sliding. That is why oil has to drop; the euro drops, the dollar goes up, oil has to go down.
That’s the plan unless OPEC and Big Oil turn off the spigot, then “supply and demand” would rule the market. This would be the first time that “supply and demand” would actually drive this market in 30 years. (That’s how phony and manipulated this has been.)
But our recently discovered and exploited resources are really significant.
We don’t need OPEC. The U.S. is an oil-exporting nation and soon will be a natural gas exporting nation. This is wreaking havoc on OPEC and flooding the market with oil and gas. Natural gas has never been so low and oil will soon join it.
All commodities are going down; I think that we’ll see deflation, where everything will be on sale for those of us who will still have jobs. Oh yes, the stock market will probably crash and take the U.S. economy with it. Thank you, European sovereign debt and Wall Street.
One could say the Obama administration’s energy policy has been phenomenally successful. We have reduced our dependency on foreign oil and we are very quickly on the road of oil and gas independence. That is beyond huge.
He is reducing the price of heating oil, gasoline and other distillates. (You’ll see the price of these items drop for the rest of the year.) Considering how high they have climbed during his administration; that also is huge.
Then the President announced on April 17, 2012 that he had asked the Department of Justice to look into oil-price manipulation. That slowed the speculators down and the price started dropping.
Now two other steps need to be implemented.
First, this is the time for alternative energy to come into it’s own with a massive push from the government. We need cities and towns to own windmills, solar farms and tidal projects. These sources of energy need to stay in public hands not subject to the whims of investors or speculators. We need regional electric co-ops who will co-own these projects.
Second, we need to reinstate Glass-Steagall and get speculators out of the energy and commodities markets.
Meanwhile, enjoy your summer driving around with your Obama gas.
Hugh Magbie is the founder of The North Star, a civil rights and reform movement. Magbie lives in Warren.