Here's an interesting take on foreign oil dependency. It comes from an article at http://mises.org/story/3085 titled America's Economic Myths. So, any thoughts on this?

David Saied, former Securities and Exchange Commissioner for Panama, wrote an interesting article for the libertarian think tank Ludwig von Mises Institute about America’s economic myths. For example:

Myth # 1: "Dependence on Foreign Oil"

This myth basically suggests that the problem with oil prices is due to America’s "dependence" on foreign oil. One of the worst economic myths, it plays on economic nationalism and on xenophobic feelings that are sometimes pervasive in the United States.

The high price of oil has nothing to do with its origin; the price of oil is determined in international markets. Even if the United States were to produce 100% of the oil it consumes, the price would be the same if the worldwide supply and demand of oil were to remain the same. Oil is a commodity, so the price of a barrel produced in the United States is basically the same as the price of a barrel of oil produced in any other country, but the costs of labor, land, and regulatory compliance are usually higher in the United States than in third-world countries. Lowering these costs would help increase supply. Increasing supply, whether in the United States or elsewhere, will push prices lower.

Importing a product does not mean you "depend" on it. This is like saying that when we "import" food from our local supermarket we "depend" on that supermarket. The opposite is usually true; exporters depend on us, since we are the customers. Also, importing a product usually means buying at lower prices, whereas producing in the United States often means consuming at higher prices. This point is proven when we see the cheap imports we can purchase from China and the higher prices of many of these same products manufactured in the United States. The amazing thing is that the protectionists claim, on the one hand, that America should be "protected" from cheap imports, but when it comes to oil, they say we should be "protected" from "expensive imported" oil.

Most, if not all, of the higher price of oil can be explained by the expansion of the money supply or the debasement of the dollar. The foreign producers are not at fault; our national central bank is the culprit.

wrong!!!!!!!!!!!!


speculation in commodities fueled by margined futures contracts fell apart after the drivers of that speculation duped institutional investors to greedily enter the "safe harbor" of staples and necessities always thriving in contracting economic cycles ever looking for the "fast buck".

the problem with the "fast buck" mentality is that institutional investors cannot back out quickly when the trends reverse, and consequently get stuck holding the bag of "hot Air". LOL.

they got played.

just like the little guys buying homes that they couldn't afford with ARMs that must reset, but that's only doable if prices rise.

the central bank has nothing to do with that.

But they can print more money because the money supply has been stolen by the "fast money" crowd that will never tip their hand.

They play everyone.

Which brokerage firms were caught with their greedy little hands in the wrong cookie jar?

Which banks are failing right now?


Who has yet to be seen crying foul except large pension funds still unwinding losing positions in commodity futures which are tanking as we speak?

They sure aren't the central bank.

they are the wannabe "fast money" crowd.

Got a stake in them that you want to disguise, hide from, or run away from acknowledging?

Blame avarice and greed and "laisse faire" white collar thieves.

Can you point them out?

hhmmm.......

gotta love the "free market"...Im sure the fat cats pulling the reins of the speculators are...

you can see the same thing happening now with grains, especially corn and soy..the "new" oil of the world...speculators have jacked up the prices so investors can reap the profits, and in the meantime, the common person cant afford a loaf of bread anymore...its happening in Latin America right now, and soon you can expect it to come knocking at your door too...

that speculation in commodities is included in the present unwinding of the market.

prices are falling.

We will get lower prices on the shelves soon.

But school teachers and union members are going to be fuming before the november election, by my guess, when their pension funds are known to have taken a catastrophic hit by stupid and shortsighted investments in commodity markets that were thought to be the "safe haven" during the contraction of the stock market and the economic activity downturn cycle always present during persidential elections.

But this cycle is even more pronounced.

Pension funds and large institutional investors that got on that train can't unwind their positions fast enough.

The buzz is out there in the financial community.

Will "fast money" plunder them on the unwinding of their positions?

you bet.

more fun on the way.

hhmmm.....

I found this......

clintonesque?


copy and paste from a CL rant...


Get rich quick ... The cause of recent American economic cycles

First it was Clinton's FAKE economy ... you know, the one where companies didn't need to make profits. All you needed to do is invest in a start-up dot com and count your money after millions of unscrupulous boiler room brokers convinced your grandmother to invest her life savings in Webvan. The stock price will be bid-up to irrationally exhuberant levels ... and you will get rich for doing nothing !

Now ... it is the FAKE housing boom ... you know, the one where you don't need any money down, and you don't have to make house payments ... you will just flip the house after it appreciates 50% in value over the next 6 months. You will get rich for doing nothing. Hell. Buy dozens of houses. Leverage your position ... that's what the rich people do. Moronic investment houses will buy your worthless mortgage paper by the billions.

TILT

Game over

I agree. If you look at the price of oil in gold the price hasn't gone up in a decade or so. In euro's it went up %200, and in U.S. dollars it went up %350 or so. The price increase of oil comes from inflation which is caused by the FED printing money. When you stop backing currency by something raw, like gold, or silver, you are asking for trouble.