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June 29, 2008 The crisis extant in gasoline prices threatens our national security as much as any threat of terrorist attack ever has. Everything is going to cost more as the price of oil continues to rise. Most of the rise is caused by simple supply and demand. As India and China, for example, become more prosperous (largely with American dollars, by the way) the demand for energy-consuming conveniences increase in those countries and they need more and more oil. We are still the largest consumers of oil, but those two countries are rapidly catching up with us--mostly because each has a population nearly 4 times as large as ours. Speculation in oil futures does have an effect, but it's not terribly out of sync with the market forces of supply and demand. Speculation in oil futures does have one major flaw. Speculators are permitted to control large quantities of oil at, say, $130 per barrel but only have to put up 5% of that value in cash in buying such futures. In other words, one can buy a $130 barrel of oil and only have to risk $6.50 to do so. That INVITES speculators who out-bid each other every day in hopes of controlling more and more of this vital commodity, driving the price of oil ever higher. The simple act of requiring speculators to put up a much larger percentage of their bid price...say, 30% or so...would bring such overbidding to a screeching halt tomorrow and the price of oil would go marginally down. I say "marginally" because the REAL culprit is a lot of demand with a limited supply. OPEC and other oil-producing countries have no particular incentive to increase their production which would bring the price of oil down. Right now, they are husbanding their oil supplies and making fortunes selling it on the open market because the demand is outstripping the amount of oil they are willing to sell. Look at it this way; if you want to buy a watermelon and the store only has one, but there are 50 people wanting it, the price the store can command for that watermelon is determined by the law of supply and demand. The more critical it is for buyers to acquire it, the more the store can charge because that melon is VITAL to the buyers' well being. Therefore, what would, in normal circumstance be a $3 melon, might sell for as much as $10! Cantelopes are VERY rare in Japan, for example, and the demand is fairly high. My daughter, who lived there for a year and a half, said that they saw cantelopes in markets with the equivalent of $50 price tags on them! The achingly high cost of fuels in the U.S. CAN be reduced. What's necessary is for the supply of oil on the markets to INCREASE. We certainly can't count on OPEC or other oil-producing countries to do anything in our best interests like increasing production and driving down prices. What we CAN do is take the handcuffs off of American companies and permit drilling for KNOWN reserves domestically--in international waters off the east and west coasts, off the continental shelves of both coasts, in the Gulf of Mexico near Florida, exploiting the HUGE supplies locked up in oil shales, and drilling in ANWR. By the way, ANWR's "pristine" nature is a fiction--at least in the part of ANWR where we know there's a huge deposit of oil. It's TUNDRA, for Pete's sake. A mosquito and biting black fly heaven in the short summer and frozen plain for about 8 months of the year. There ARE no snow-capped mountains, gamboling caribou calves, cute little arctic foxes eating goslings or crystal-clear streams. It looks like the MOON. We've been sold a bill of goods by the enviro-freaks and their willing accomplices in the mainstream media. Democrats' latest talking point is "We can't drill ourselves out of this mess." That's actually a blatant lie. We CAN produce domestic supplies that could completely wean us away from foreign oil. We have every bit as much oil available as the entire Middle East has and it's right here in the good ol' U.S.A. or just off of our shores! Most importantly, at the end of WW II, the Germans had perfected a method of making "synthetic oil" out of COAL, and no one has more coal than we do. If the government were to announce an all-out push to turn our vast coal supplies into oil, the bottom would drop out of the futures market and the price of oil would drop dramatically. Coal is, after all, simply "ossified" crude oil and the current oil prices make its conversion to oil imminently affordable. The price would go down, of course, but even at $30 per barrel, companies would make money by turning coal into oil and we have the potential supply to make TRILLIONS of barrels of oil--enough to last the U.S. for 200 years or more without buying a single barrel from the middle east ever again. Why aren't we doing it? It's because the Democrats have sold out to their moneyed people--the environmental lobbies--who have one ultimate aim; the destruction of the American economy so it can be turned into a socialist "paradise." Don't let them get away with it. Write, e-mail, call or button-hole your Congressmen and women on the street if you have to. But let them know that WE demand immediate action and to the devil with their political futures. ------------ About the author: David A. Jared is a news junkie, semi-retired and an avid golfer who's been writing his first book, "4000 years of chopsticks" for the last 20 years. Email: jaredland@sbcglobal.net ------------- All articles are EXCLUSIVE to Useless-Knowledge.com and are not allowed to be posted on other websites. ARTICLE THIEVES WILL BE PROSECUTED! |
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