A Conservative’s View of the World from the Heartland

Gribbit’s Word

1280 x 1024 screen resolution STRONGLY recommended


"In the spirit of reaching across the aisle, we owe it to the Democrats to show their president the exact same kind of respect and loyalty that they have shown our recent Republican president." - Ann Coulter

1280 x 1024 screen resolution STRONGLY recommended
August 15th, 2008 at 4:53 pm

Oil Falls, Gold Falls, & Dollar Rebounds, All While DemCong Vacations

in: Election 2008, Energy, Fiscal Responsibility, Lunatic Lefties, Opinion, Presidential Candidates, Stupidity, The Do-Nothing Congress, The Economy, U.S. House, US Senate

As the Do-Nothing Congress vacations, oil prices are falling, gold prices are falling, and the dollar is becoming stronger. What?!? The oil companies weren’t to blame? OH THE HUMANITY!

From the Associated Press via Yahoo Finance:

Light, sweet crude dropped $1.24 to settle at $113.77 a barrel on the New York Mercantile Exchange, and earlier traded as low as $111.34, its lowest level in more than three months.

Oil fell on a growing sense that economies around the world are joining the U.S. in a slowdown. The rising dollar, which is gaining strength on economic concerns, contributed to the sell-off in crude and other commodities. Oil is down more than $35 from its July 11 record of $147.27; meanwhile, gold prices that swept past $1,000 an ounce earlier this year are now below $800.

It seems that the cause for our rising oil prices was at least in part due to a weak dollar. Investors often hedge investments against a weaker dollar by investing in - wait for it - gold and oil.

From Bloomberg:

The dollar headed for a fifth weekly gain against the euro, its longest winning streak in more than two years, as crude oil prices declined and the European and Japanese economies contracted.

The U.S. currency rose to the strongest level in almost six months against the euro and a seven-month high versus the yen. The pound dropped for an 11th day against the dollar, the longest run of declines in at least 37 years, on speculation a recession will force the Bank of England to cut interest rates.

Against the euro, the dollar rose 1 percent to $1.4683 at 3:28 p.m. in New York, from $1.4826 yesterday. It reached $1.4659, the strongest level since Feb. 20. The U.S. currency increased 0.7 percent to 110.54 yen, from 109.74. It earlier rose to 110.66, the strongest since Jan. 2. The euro fell 0.2 percent to 162.31 yen, from 162.68.

The U.S. currency has risen 2.2 percent against the euro this week in its longest stretch of weekly gains since February 2006. It’s headed for a 0.3 percent advance versus the yen, its second straight weekly increase. The euro is poised for a fourth weekly decline against the yen, dropping 1.9 percent, the biggest decrease since May.

Also from Bloomberg:

Gold tumbled below $800 an ounce in Asian trading as the dollar headed for its longest winning streak in more than two years, reducing the appeal of the metal as an alternative investment to U.S. assets.

Oil, gold, copper and corn have plunged from records this year as the dollar strengthened and concern mounted that slower global economic growth will cut demand for raw materials. Silver and platinum also tumbled today amid increasing expectations the Federal Reserve won’t cut interest rates.

So the DemCong does what it does best - NOTHING - and oil prices fall. It seems that the free market actually does work.

The Strategic Petroleum Reserves didn’t need to be tapped Mr. Obama. The oil companies didn’t need to be taxed Ms. Pelosi and Mr. Reid. However, I do feel that the federal tax on gasoline needs to be suspended.

Oil companies profit about 9 cents per gallon from the sale of gasoline. The federal government profits 18.4 cents per gallon from the sale of gasoline. And the American consumer pays an average of 47 cents per gallon in taxes to state and federal governments when buying gasoline. It seems incomprehensible that the sales taxes on this product far exceed the profit margin and yet the taxing body finds it necessary to threaten oil companies with additional taxes that would eventually become the consumers’ burden to pay.

The federal tax alone is more than double that of the profit margin on gasoline. The overall average tax burden on gasoline purchases is 5 times the oil companies’ profit margin. This is disgusting.

So I don’t want to hear of more taxes on oil and oil products when the state, local, and federal governments are making more money of gasolines sales than the oil companies. Especially when the dependency on foreign sources of oil is 70%. Before we give the government more money that we pay at the pump for gasoline, let us explore the idea of making this nation truly energy independent. Drilling is the first step. We simply cannot rely on alternative energy sources that are years away from full development to bring us independence. We MUST take steps NOW on our own to ease the dependency.

Oil is our current energy standard and there is nothing that can replace all that it does. We have oil here in the United States but we haven’t been able to tap it because of liberal environmental policies. Our problems today were created in the 1970s when liberal environmental regulations began to make foreign oil more attractive. It became cheaper to produce oil in the Middle East and ship it via freighter to the US than producing it here.

In summery, our current situation was created by Democrats and they cannot be trusted to solve it. True it will take time for new drilling to ease our dependency issues. But remember, it took 30+ years of the current policies to create our current problems. How bad will it become if we do nothing? And how much worse will our economy suffer as a result?

Bookmark and Share
[del.icio.us] [Digg] [Reddit] [Sphere] [StumbleUpon] [Technorati] [Email] More »
Sphere: Related Content




Comments are closed.