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Oil Is a Sticky Commodity

By Larry Leonard

While Obama has slowed to a snail’s pace the processing of permits to seek oil in federal lands both off and onshore, he wants to make it more expensive by the elimination of these depletion allowance plus higher taxes, perhaps in the corporate area — yet, I recall George Soros a couple of years back buying some stock to the south, and being involved in some vague way with the sending of the floating drilling platforms out of work in the Gulf to Brazil.  I also recall two billion dollars sent by the Obama Administration to Brazil, or possibly Venezuela. Maybe both.

My point is that Obama’s every move has been to at least slow the pace of domestic development while subsidizing foreign development.  Since he subsidizes Solyndra and the Volt, and wants to reduce oil subsidies (thus, profits) I can’t find his scam, here.  Yes, higher gas prices will benefit electric car sales, but the power most of them will use to charge their batteries comes from the coal fields his EPA is strangling.  All that will do is raise the price of electricity — particularly if he insists on getting it from solar and wind, one of which doesn’t work at night.  The other one doesn’t work when it isn’t windy.  Maybe his friends are in natural gas.

BTW, I heard somebody say that OPEC popped up when Richard Nixon took the dollar off the gold standard.  If that is so, then OPEC was as fiscally intelligent when they did it, as those here who treated the election of Obama as a perfect time to cash in half their American stock and use the money to buy gold.  (Their wealth today is the same as it was then because gold rises or falls based on the value of the dollar — that is goes in the opposite direction.  That’s why they call it a hedge against inflation.  The dollar goes down and gold goes up the same amount. Apparently, in terms of actual value, oil does the same thing  — and the doubling of the price of gasoline since Obama took office and had both houses of congress is based on the devaluation of the U.S. Dollar.

Inflation is related to both the number of dollars the government prints, compared to the GNP, or production of real wealth, and finally the national debt/spending situation is factored in.  It looks like this:

Those are photos my dollars. This is why gasoline costs more and more.  Each fillup we are paying with a smaller dollar.  So, OPEC inflates the price of oil to match the actual value of the dollar.

This is a current news item.  Obama spoke about it this week, while standing in front a stack ot pipeline pipe segments in what looked like Oklahoma.  He okayed the completion of the much-discussed tube from there to the Gulf refineries.  He didn’t mention that it will be of no use for the import of Canadian  (frack oil from sandstone and shale deposits in Canada).

I don’t know if Montana and North Dakota can buy oil from Canada.  I don’t know if the federal government can control that sort of thing.  They are in charge of inter-state commerce.  Are they in charge of commerce between an American state and a foreign seller?  Maybe it’s only the pipeline that the EPA can block.  Maybe a thousand railcars a day from Canada to Oklahoma cannot be blocked by the feds.  I just do not know.

Politically speaking, some of the above may prove that oil is a sticky commodity.  He may need a bath of Dawn Detergent by November.

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