What’s FUELING High Gas Prices?
There is no doubt, soaring oil prices could trigger global economic troubles – if it hasn’t already. Add to that, Japan and the U.S. have announced higher unemployment rates recently.
A statement from the five top energy consumers – the U.S., Japan, China, India and South Korea, claimed that “high prices are a menace to the world economy.” They implied that the outrageous prices are against the better interests of both producers and consumers, and pose a “heavy burden” on developing nations. They agreed upon a solution, that more oil should be produced. Say WHAT? When are we going to get off of oil in this country? Whatever happened to Project Independence (1974), that has now become Project Dependence? What is behind this outrageous crisis?
Energy experts argue that most oil producers, do not have the ability to expand. Saudi Arabia, claims that there is “no oil shortage now- or in the future.” They claim they can increase their production by another 2 million barrels a day. But, for whatever reason they are choosing not to. So, this out of control oil price spiraling, cannot be justified by the so called supply and demand theory. We can’t blame any one political entity, or China imports, or Mexico and Venezuela for not selling to us. The problem can be blamed, however, on our own government. In particular, the CFTC (Commodities Futures Trading Commission). The government refuses to clamp down on energy futures stock trading. They allow leveraging by wide margins, based on speculation of what the markets are going to do. It is this leveraging, that had much to do with the banking and real estate problems that have occurred in the last two years.
In the last 5-10 years there has been an influx of one billion more consumers infiltrating new and emerging markets world wide. They are working, eating and buying more. Because of this, there is more demand on all commodities. This will continue to drive prices higher at many levels, no mater what we do. Anything that can be sold on the global market will cost more. That is a fact. From here on out, the entire world will determine what we pay for oil, gasoline, commodities and raw materials. Gone are the days when the U.S led the global economy, and set a shining example for the world to follow. Let’s just hope we can find a way to become a self-sustaining nation once again.