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Inflation

Discussion in 'General Discussion' started by cycloneman, Jul 6, 2011.

  1. cycloneman

    cycloneman Well-Known Member

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    I got this in a email so i dont have the link


    America's Oil Price Inflation Crisis is Yet to Come

    NIA is very disturbed by President Obama's decision to sell off oil from the U.S. emergency oil reserve, in an attempt to drive down oil prices. One week ago it was announced that the U.S. and other oil-consuming nations that are a part of the International Energy Agency (IEA) will begin releasing 60 million barrels of oil from their reserves, with 30 million barrels coming from the U.S. government-owned reserve. They hoped that by flooding the market with excess supply, they would cause an artificial forced liquidation of oil futures contract holders who bought using leverage.

    The U.S. Strategic Petroleum Reserve is the world's largest government-owned stockpile of emergency crude oil reserves and is maintained by the U.S. Department of Energy (DOE). It holds 727 million barrels of oil reserves at four different sites along the Gulf of Mexico . Considering that the U.S. is releasing 30 million barrels of oil from these reserves, we are reducing the size of our emergency reserve by 4.1%.

    After Obama's decision was announced on June 22nd, crude oil prices originally dipped as much as $5.71 per barrel from $95.41 per barrel down to a low of $89.70 per barrel on June 23rd. Oil prices declined slightly more during the next two trading days, reaching a low this past Monday of $89.61 per barrel and closing Monday at $90.61 per barrel. However, oil prices have surged $4.81 during the past three days and are currently $95.42 per barrel. Oil has recovered the entire dip that came after Obama's decision was announced and is now a penny higher than before his announcement. Unlike 2008 when most oil futures contract holders were hedge funds using leverage in an attempt to make short-term profits, today most oil investors are much stronger hands who bought with cash, because the world is now flooded with dollars thanks to Federal Reserve Chairman Ben Bernanke.

    It certainly wasn't worth jeopardizing the homeland security of this country by reducing our emergency oil reserve by 4.1%, just to see a $4 reduction in oil prices that lasted for only 3 days. If the White House had any faith whatsoever in Bernanke's assertion that rising oil prices are only transitory, there would be no reason to release 30 million barrels of oil from our emergency reserve. The rising oil prices we have experienced so far is far from an emergency. The emergency will come soon when the world turns its back on the U.S. dollar and we see a rapid decline in its purchasing power. The emergency will be here when the U.S. can no longer import oil from foreigners at any price due to hyperinflation, and we are forced to live with only the oil produced in this country.

    At any time that they choose, China has the power to set off in our country the economic equivalent of a nuclear bomb. China can at any time announce that they are no longer going to buy U.S. treasuries, but they are going to take their $2 trillion in U.S. dollar reserves and use them to buy gold. The price of gold would double overnight, with the U.S. dollar immediately losing half of its purchasing power. The yuan would then skyrocket in purchasing power, automatically giving China the world's largest economy with the Chinese GDP soaring past U.S. GDP. There would be a massive rush out of the U.S. dollar with our trading partners unwilling to export any oil to us.

    The U.S. currently produces only 5.5 million barrels of oil per day, but consumes about 19.3 million barrels of oil per day, with total input into refineries of 14.7 million barrels of oil per day. This means the U.S. currently needs to import 9.2 million barrels of oil per day. U.S. commercial crude oil stockpiles are currently 359.5 million barrels or enough to last for 24 days without any domestic production. In the event of hyperinflation where the U.S. is cut off from oil imports, if we were forced to live off of our own oil production of 5.5 million barrels of oil per day, our commercial stockpiles would be gone in 39 days.

    Without an emergency oil reserve, in the event of a major oil shortage due to hyperinflation, after a period of just 39 days, farmers won't have enough oil to produce food, manufacturing plants won't have enough oil to process and package food, and logistics companies won't have enough oil to get finished food products into our supermarkets. This is why we have an emergency oil reserve, to prevent store shelves from becoming empty in our supermarkets due to a fuel shortage.

    It takes 13 days for oil from our emergency reserve to begin entering the market and once it does, the most it can add to the market on a daily basis is 4.4 million barrels of oil. Therefore, in a crisis we must first use only our commercial stockpiles for 13 days, which would cause our commercial reserve to decline down to 239.9 million barrels of oil. Beginning on the 14th day of a crisis, 4.4 million barrels of oil per day can come into the market from our emergency reserve with 4.8 million barrels of oil per day entering the market from our commercial reserve.

    After 50 additional days, our commercial reserve will be depleted and all that will be left is 507 million barrels of oil in our emergency reserve. That will give us 115 more days where we can withdraw 4.4 million barrels of oil per day, but the U.S. will be forced to reduce its daily oil consumption by 33% during those 115 days. This is based off of an emergency reserve of 727 million barrels of oil. With Obama this month prematurely releasing 30 million barrels of oil from our emergency reserve, we will actually only have 108 days where the U.S. will be able to consume 2/3 of its normal oil consumption, after 63 days of full oil consumption.

    The solution to high oil prices is not more government intervention, but is less government interference in the free market. Instead of trying to manipulate oil prices down using artificial methods that will only last temporarily, the U.S. government should look at the root cause of rising oil prices. Oil is rising due to the U.S. government's deficit spending and the Federal Reserve's willingness to monetize our deficits and debts. If they want to see lower oil prices, the government should start out by eliminating the DOE. The DOE was created in 1977 to make the U.S. less dependent on oil imports. In 1977, we imported 44% of the oil used in U.S. refineries. Today, we import 63% of the oil used in U.S. refineries. Eliminating the DOE would save this country $27 billion annually.

    Priced in terms of real money (gold), oil prices haven't been rising at all. The Federal Reserve's QE2, in which it printed $600 billion out of thin air, has created artificial demand for oil. If it wasn't for the Federal Reserve working tirelessly trying to prevent a much needed recession, Americans would be cutting back on oil consumption and oil prices would be declining. If the free market was allowed to operate, falling oil prices would make it easier for Americans to live with the real unemployment rate currently at 22.3%.

    It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us

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  2. Shooter45

    Shooter45 *Administrator* Staff Member

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    I only have one word to sum up this whole mess.......MORONS. :mad:
  3. reflex1

    reflex1 Active Member

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    There are definitely some morons someplace. And prices at the pump have jumped a dime in the past day or two - go figure!
  4. flyingtiger85

    flyingtiger85 Well-Known Member

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    Part of the reason for the high price of oil is that oil is traded in U.S.dollars and they devalued our currency by printing all that money.We need to drill and use our own oil ASAP.Forget the the Saudi's and Brazil too.


    P.S.We need to keep it traded in U.S.dollars not a European basket of currencys.
    Last edited: Jul 6, 2011
  5. cycloneman

    cycloneman Well-Known Member

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    i think they know exactly what they are doing, its on purpose.
  6. medalguy

    medalguy Member

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    +1 ^^^^^
  7. Python

    Python Former Guest

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    Correct thinking.
  8. jbmid1

    jbmid1 Well-Known Member

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    Nobody could be that stupid.....right?
  9. Inthewind1976

    Inthewind1976 Member

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    One thing is for sure - nationally (in the US I mean) the price of gasoline relative to the price of crude oil, seems to have been "manipulated" extensively over the last 10 years, and this is especially true over the last 6 years. Does anyone remember that in early 2008 the price of oil per barrel exceeded $100 and the price of gasoline reached a near $4 a gallon peak, and by early 2009 the price per barrel FELL below $50 a barrel and the price of gasoline below $2? THAT RECENTLY. We have a number of issues here in the US that have lead, and continue to lead, to outrageous fuel prices. One of the biggest issues is the move during the second Clinton term to drastically reduce; nearly eliminate; domestic exploration for oil and the resulting reduction (closing and failure) of many of the domestic refineries that resulted. You cant turn crude oil into gasoline, or diesel/heating oil without refineries and there are fewer today than there were 10-12 years ago. Increasing domestic exploration and domestic production is PART of the answer, but without the re-establishment of more domestic refineries, the refineries become the pinch point in the equation.
  10. Gun Geezer

    Gun Geezer Well-Known Member

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    I just don't know why people are complaining about high fuel prices? If you listen to big oil, the high gas prices are actually keeping fuel prices down. How so, you ask? Their answer is, high fuel prices will lead to decreased demand. Decreased demand leads to greater supply and greater supply leads to lower prices. Sure seems to be working. In fact I'm so convinced the big oil companies are really concerned about our welfare and not their profits that I'm actually looking for an electric car so the lying, cheating rotten SOB's can pack their oil right in their pooper's. Manipulate this!
  11. Python

    Python Former Guest

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    The oil companies would like nothing better than to drill and build new refineries, that's their business. The American people have opposed all progress by the oil companies for the past 30-40 years. Even today when the need is more than ever before, the American people say NO. I don't know why people are complaining about high fuel prices either, we're only getting what we deserve.
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