Why are gas prices rising? Duh.

[Madison320]

really? it's as simple as inflation?
Why haven't housing prices continued to rise if that's the case?

Because 2 things determine the price of something. The supply and demand of the item AND the value of the unit (dollar) the item is priced in. There are too many houses and not enough buyers which is outweighing the effect of the weaker dollar. If the value of the dollar had not changed house prices would be falling even faster.

[ILUVRP]

i said nothing about all things traded being for delivery only , only if it was under a cartel where the supply could be controlled to keep the price high .

i wonder why diamonds are not traded on the exchanges , could it be the the supply is controlled by debeers ? there are enough diamonds in the world to give everyone a bounch of them.

crude oil is not in short supply there is more crude oil in storage than ever.

i guess when you start paying $5/ga for gas and crude oil futures are at $150/ba ( therefor giving much more money to the bad guys of the world ) you will understand what free trade really means.

the prices for bicycles/refers are controlled by supply and demand. there is no supply/demand control of crude oil, the price is controled mainly by big specs/producers.

i will repeat --where is the free trade when the supply of a product is controlled ????????????

name me one more product that is traded on our exchanges that has a cartel controling the supply.

and yes , when leaman brothers / citi / goldman sucks and the big headge funds pump the price of crude oil up to make billions of $$$$ off the avg american -------make them take delivery of the crude if they need it so much.

i feel very sorry for you people that don't understand .

i will add , everyone remembers the early 80s when hunt/an arab/a so american tried to control the silver market , what did the exchanges do , they limited the number of contracts a non-headger could hold , they raised the margin requirement sky high .

as a side note i own stock in USO , so if the price of crude oil goes up i make more money off the uso than i pay for higher gasoline prices , but all people can't do this.

[Brian4Liberty]

Monetary inflation is always a factor. But it does not have to be the only factor.

This is nothing special. Gasoline storage facilities are full.

Gasoline demand is at the lowest levels in a long while, yet gas prices are higher than ever before. That is inflation.

That is Oligopoly.

crude oil is the only commodity in the world that is controled mainly by a cartel (OPEC ) , big speculators help pump the prices , as it is a no lose commodity , we will never see crude prices below $90/ba if things remain as they are now.

What about diamonds?

Cartels and speculators have varying degrees of success at controlling or fixing the price and supply of commodities.

There is no doubt that if a Hedge Fund or other large Wall St. speculator makes a billion dollars in a commodity, it comes out of someone's pocket. Could be the producer, the consumer, or a middle man, but that money doesn't come out of thin air. (As opposed to Wall St. bankers, who do get money out of thin air courtesy of the Fed).

[Brian4Liberty]

On the local news here in California, the leftists are praising higher gas prices, saying that it needs to go higher to "change people's driving habits".

Nothing more dangerous to the economy and the people than well-intentioned do-gooders combined with a crony corporatist government.

"Can we raise prices? Well, sure, we can do that if it's needed to save the environment."

[Seraphim]

And those twits will be first to throw rocks through grocery store windows when the cost of transportation for food means higher prices in the grocery stores...

On the local news here in California, the leftists are praising higher gas prices, saying that it needs to go higher to "change people's driving habits".

Nothing more dangerous to the economy and the people than well-intentioned do-gooders combined with a crony corporatist government.

"Can we raise prices? Well, sure, we can do that if it's needed to save the environment."

[rockerrockstar]

Some people are crazy when it comes to trying to stop people from driving because they see it as a environmental threat. It is really crazy.

Now some of you supported the pipeline from Canada. It takes higher gas prices to make alternative means of getting oil viable like getting oil from tar sands.

Personally I would rather that gas remain less than 2 dollars a gallon but currently it seems to be headed for $4 or $5 a gallon. Sucks for us.

One upside is if gas gets too expensive then alternatives like plugin and hybird become more economical. The higher prices could help fund technology for future alternative cars and also help people start switching to these alternative cars. The scary news is that if this happens gasoline taxes would need to be charged in another means to help fund roads. So taxes will change to pay for roads.

[ILUVRP]

Monetary inflation is always a factor. But it does not have to be the only factor.



That is Oligopoly.



What about diamonds?

Cartels and speculators have varying degrees of success at controlling or fixing the price and supply of commodities.

There is no doubt that if a Hedge Fund or other large Wall St. speculator makes a billion dollars in a commodity, it comes out of someone's pocket. Could be the producer, the consumer, or a middle man, but that money doesn't come out of thin air. (As opposed to Wall St. bankers, who do get money out of thin air courtesy of the Fed).

i did say diamonds are a controled and are not traded on the futures exchanges , in the 60's russia which has a lot of diamonds also was going to undercut d beers on diamond prices , dbeers sent people to russia and told them if they did that dbeers would dump so many diamonds on the world that the soviats diamonds would be worthless . guess who won that one.

i have no problem with someone speculating in the commodity markets , when i had a farm i sold forward contracts on my crops to lock in the price i needed.


i have a big problem when a cartel controls a lot of any product and it is traded like a free market product. i will bet anyone ( not $10,000 ) that we will not see crude oil below $90/ba in the next 5 yrs , if the price gets near $90/ba OPEC will cut supplies.

where is the free mkt , i would advise everyone to forget gold/silver and buy crude oil .

[Brian4Liberty]

i have no problem with someone speculating in the commodity markets , when i had a farm i sold forward contracts on my crops to lock in the price i needed.

i have a big problem when a cartel controls a lot of any product and it is traded like a free market product.

Well, sometimes it's a matter of degree. Selling forward contracts on your crops is part of the farming business. No problem there, especially if your contracts are with people who will actually take delivery of your product. I question the need for a Chicago Exchange and Hedge Funds to be part of that process though. We should question the wisdom of commoditizing every conceivable product and financial instrument in the world. This does not benefit the core businesses, supply chains and customers involved. It does further the agenda and reach of Wall St. banksers like JP Sachs, who in essence collect a tax on every possible business transaction. Look how well that worked out when they commoditized debt.

[Traditional Conservative]

Oil prices are rising because investors know that we'll be going to war with Iran soon.

[3kgt]

I actually wrote this note concerning gas prices and inflation on my facebook today:

For the past four years now we've seen gas prices rise steadily from an average of $1.84 per gallon to what I paid today, $4.07 (I run 93 in my car). The talking heads on the television are putting the notion in our heads that this is because of the recent tensions in the middle east namely Iran. Frankly I find this rather insulting because A.)This is not how economics works, the Supreme Leader of Iran doesn't wake up one day and decide to charge an extra $50 for a barrel of crude and B.) Iran is one of many oil producing countries and it is only second tier at that. The U.S. produces around 225% the daily amount of crude oil that Iran does.

So why the rising gas prices?
First we must ask ourselves, are gas prices actually rising?
There are two answers. A keynesian economist would say yes.
I fancy myself an austrian economist and I say no.
We look at the data and acknowledge that yes, it costs more dollars for a barrel of crude than it did in 2008.
However this is not so much because gas is more expensive, as it is the dollar losing its value through inflation.
I'm sure you've heard of the housing bubble. Unsustainable housing loans given through the government organizations Freddie Mae and Fannie Mac artificially inflated the housing market which popped in 2008 crashing the stock market and causing a dangerous period of intense deflation. One arguably positive short term side effect of this crash was the dramatic drop in gas prices (nearly $2/gallon!).

However over the past 3 years we have seen the market correct itself and once again gas has risen to sit comfortably around $4/gallon. Let's take a quick look at the chart below, first the data represented by the black line - the price of gas. Holy crap, it's getting expensive lately isn't it? Well I guess. That's the line the keynesians focus on. Now I'm going to give you the red pill and we're going to look at the data adjusted for inflation on the red line. That makes things much more interesting. We see the red line affected by the economy somewhat, dropping and rising and yet, peaking at the SAME PLACE in 1918, 1981, and now.
Essentially what this means is the net cost of gas HAS NOT RISEN and you are BEING LIED TO.
The cost of gas has not risen - only it's price in dollars!

[IMG]url=http://img151.imagevenue.com/img.php?image=785694189_Inflation_adjusted_gasolin e_price_med_122_441lo.jpg[/IMG]
Gas price adjusted for inflation.

So, what's behind the rise in gas prices? Its that same evil word that's behind the rising cost of clothing, food, and other consumer commodities - one you may hear about is gold, which has risen to a rediculous price in the past 5 years as people move their wealth to gold instead of the dollar (they know what is coming).

Some say its Bush's fault, some say its Obama's fault, I say its the fault of the bankers and every president since 1913. The Federal Reserve System, created in 1913 along with the income tax, prints money and loans it to the government with interest. The money taken from our income tax goes back to the federal reserve to pay this interest and it becomes a vicious cycle that America has been dragged through for 100 long years now. We've managed to save ourselves by printing money and artificially inflating and deflating the system many times over, but with a $15 trillion debt and the dollar having been devauled 96% from its original value we have reached the end of this cycle and we will stop the easy way or the hard way.

Soon we will experience hyperinflation and the dollar will fail. This will happen in the next 1-5 years. If you want to avoid losing your entire savings or being without money when this happens I suggest buying silver or, I suppose gold if you can afford it (just go with silver its easier). This is an easy failsafe to protect yourself from financial disaster, and worst case you can just sell the silver back for a profit.

Before I go, I will add that the only presidential candidate that understands inflation is Ron Paul. He has the knowledge and the plan to fix the economy and he is the man responsible for me knowing what I know now. This is the guy that is going to save us if we choose to let him. Don't be fooled by the people telling you he can't win. He most certainly can if we, the people, wake up fast enough.