Oil Prices and what is causing them to rise

I was included on an email thread by a friend about the reason oil prices are going up.  I know my good Friend Rick Jensen (1-4PM on 1150WDEL www.wdel.com) has a bug up his butt about "speculators" and that he's had numerous "money people" from Peter Schiff to Stephen Schork on his show in an effort to prove his theory right and they have all pretty much said the same thing: Speculators ARE driving up the price...but that's their job.  They are not the CAUSE and regulating them more won't do anything to reduce the price, in fact it might increase it.  Anyway, back to the original thread, the email contained a piece by Brian Wesbury (click here to read the piece) in which he calls the theory of speculators to task.

Brian makes excellent points and points that I have been making for a long time.  Stop looking at the difficult answers...the easy ones are where the "beef" is.  Here is my response to the email thread:

Amen! I’ve been talking about this for a LONG time now. There are three main causes of the spike in oil prices: The Fed, lack of domestic drilling and the Middle East

The Fed – I think all of us on this thread understand that more money printed, drives down the value of the money in circulation just like more widgets drives down the price of all widgets (unless you add in union labor…but that’s another story ;]) which is nothing more than SIMPLE Econ 101 (most of our problems would be solved if we just went BACK to Econ 101) and the law of Supply and Demand. In the currency markets (again as you know) this is called inflation. The more you print, the less it’s worth. The reason is because our dollar isn’t BACKED by anything…really since the Fed was created, the dollar, that is to say the federal paper note, has been unpegged from hard assets like Gold. It’s no different than a personal loan, if you have collateral, for instance, you ask the bank for a loan for $100,000 to make a large purchase… if you give them the deed to your home in case you don’t pay it back, you are far more likely to get the loan than if you showed up with nothing. Why? You’re less likely to walk away from your home than you are from a promise alone. Our currency was once issued based on the amount of gold we had. The denomination of the currency was changed based on the finite resources of gold. Since paper notes relied on the issuing bank (remember, we had no central bank for large chunks of our history…currency was issued by local banks and based on their gold supply) maintaining gold reserves, bank runs and travellers redeemed their notes in physical gold (more often coins and bullion than gold nuggets). Now, our dollars are backed by what? The word of Congress. The word of politicians who lie to their wives, who lie to their GODS and who lie to US. Heck, the word of politicians who don’t even UNDERSTAND these basic truths. If there’s nothing behind the paper, what stops them from printing as much as they want? Nothing, and that is EXACTLY what they are doing now. They’ve gotten to the point where we now have more printed dollars in circulation than we create in revenue each year. That means we are actually backing up our money supply not with gold, or with revenue, but with IOU’s from the government. This is what they call “monetizing the debt”. This causes commodities that are PEGGED to the dollar, like oil, gas, food, etc. to rise in price as it takes more of the dollars to buy the commodity but what will happen is that intrinsically valuable items (gold, silver, etc.) will eventually replace the dollar as the peg for commodities and the market will reset. Speculators will shift to the gold market.

Lack of Domestic Drilling – Simply put, if we CREATED more supply at home, where WE had a stable source, and for that matter if our energy policy relied on proven sources of energy instead of Wind/Solar/Battery tech that doesn’t even yet exist, speculators would have no gloom to doom about. Or at least less. American energy RESOURCES are actually keeping speculators from driving the price up FURTHER because we do HAVE the coal, oil and natural gas that we can use for power if we need it (and we need it bad!) in an emergency and in the longer term with an administration with a better energy policy. Next time you drive by an oil derrick, coal mine or gas well, thank a gas company for keeping America running (even if the engine DOES need some work).

Middle East – If you don’t think the instability in the Middle East is contributing to speculator concerns, I’ve got some Oceanfront property in Arizona for you to check out ;) and it’s goin cheap! The Middle East is on fire, not just one or two countries either, I mean the ENTIRE thing. Iran, Iraq, Syria, Jordan, Yemen, Bahrain, Saudi Arabia, Egypt, Libya, Somalia (pirates) are all on fire and taking anti-American/anti-Europe/anti-Israel positions. It’s counter intuitive to think that people buying a product for the long term, wouldn’t look at what’s going on over there and say “Gee, oil might be hard to come by later, I think it’s going to be something I should take a chance on.” Any smart business person would plan for the future. So what goes on in the Middle East makes a difference, of course it doesn’t help that our American economy is also on fire and our credit limit is being downgraded.

It’s absolutely THIS simple. If we had a decent energy policy, drilled for our own oil, fixed our economy, got out of debt, cut spending and stopped printing money, the price would shrink.

It's official

After much consideration, I have decided to support John Sigler for Chairman of the Delaware Republican Party and Greg Lavelle for Vice Chair.  I have waited until I could have as much information as possible learn all I could.  I feel that for Chairman of the Republican Party you can do NO better than John C. Sigler, former NRA National President and a longtime Republican and Reagan conservative.  He's the right person at the right time and in the right place.  On the Vice Chair side, I know Don Ayotte and I know Greg Lavelle.  Both are fine gentlemen with spirit, energy and integrity.  Lavelle adds the dynamic of bringing the elected officials BACK to the table of party politics.  No one can accuse Greg of being as conservative as Don, and that is a plus for Don, but Lavelle gave such a passionate defense of family values in objection to S.B. 30 that the Democrats cut debate early to ensure the bill would pass.  It's my belief that Dover SHOULD be involved in party politics, it's also my belief, much to the chagrin of some, that all sides need to be represented and Greg brings a balance I think that Don lacks.  In addition, while I like Don, I just don't believe that he is ready to be Chairman or Vice Chairman of the Delaware Republican Party. 

Most of this will not sit well with some in the conservative circles and as of this writing I have gotten at least a few calls/emails about the fact that I am supporting Lavelle of Ayotte (though mysteriously no one seems to care that I am not supporting Mike Protack.  Besides, anybody is better than Tom Ross.

Announcing my endorsement for GOP Chairman

I've been holding off on this for a while.  People have been asking who I am going to support and I have been cautious.  I know that my endorsement doesn't affect a ton of people's opinions but I also know that it does affect some.  I wanted to meet, speak with and digest each of the candidates for chairman of the GOP.  I owed that to the people who look to me for guidance or for assistance.  I've paid the money to see them debate and I've read all 17 pages of their plans.  I think every one of the three candidates for chair has a place in the party.  I have said that for some time.  John Sigler has a tremendous resume, a Rolodex that few if any in the state can match and the passion and foresight to infuse the party leadership with conservatism.  He has the pedigree and value set to rebuild and to heal the party.  Mike Protack has perhaps THE best plan for the organization, communication, outreach and platform of the party that I have seen anywhere.  The question with Mike is, can he heal the party division given his past?  Don Ayotte has more fire and energy than people 1/2 his age.  He's smart and he has great ideas for outreach.  My concern with Don is that he may have trouble bringing in high dollar donors. 

I am announcing my endorsement of John Sigler for Chairman of the Delaware Republican Party. I believe he is the best equipped to bring together the old and the new, the conservative and moderate and the TEA Party and party elites.  I also think his Rolodex is going to be tremendously beneficial to the party.  I would also like to see Mike Protack as Vice Chairman and Don Ayotte as an outreach coordinator.  The Chairman and Vice Chairman MUST come from different counties and Mike has developed a plan that is second to none.  As Vice Chair, he would be able to work with John to implement a plan to rebuild and energize the party and bring people back to our ideas of Freedom, Liberty and Opportunity.  Don Ayotte has tremendous energy and incredible outreach ideas.  We need him in the party, we need him involved at the statewide level and we need him working to bring people to the table.

I'm urging all of the delegates who value my opinion, to cast your vote for Chairman for Mr. Sigler at the convention on April 30th and to also cast your vote for Mike Protack for Vice Chairman.

DelDOT thugs like Bad Santa's

Families in Radnor Green/Ashbourne Hills, a blue collar community in Claymont, Delaware are surveying the damage caused by DelDOT employees who, in Grinch like fashion ripped their recreation literally from the ground.  Like the little town of Whoville that was terrorized by a Grinch whose heart was an empty hole, residents in Claymont were terrorized by a nanny state run amuck.

Sure, the month was March and DelDOT uses trucks not sleds, but the song below accurately describes the actions of the State of Delaware's Department of Transportation and their feelings on the situation:

While it might seem funny when you read comments like those above, the real facts and the lives affected by the actions of an oppressive government don't leave much room for laughter.  While there have indeed been dissenting opinions on this, most rational people agree, government was in the wrong.  Some have blamed the owners for not complying with the government order to move their property (some of these poles had been in place for 40+ years) despite the fact that the families had followed the correct process to challenge the law, while others have insisted the blame rests with the government but that it should be limited to those who passed the law and passed along the work order to the ground workers.  Normally I would agree with that second group but I have had a week to see what the DelDOT ground workers actually think. 

The link above will take you to a Facebook page I created for discussion about the incident.  I expected the DelDOT workers to defend their actions but I was not prepared for the utter contempt they held for the property owners or for the legal process that made their enforcement questionable.  Further discussions would show the true colors of Delaware's public workforce: It doesn't matter what they do, what they say or how they affect your life because THEY are union and THEY enforce the law, no matter how wrong or unconstitutional it is. 

You need to keep that mindset in mind when you read the rest of this story.  To government workers, WE THE PEOPLE are not their bosses, we are the sheep that they must corral.  They don't care that we, the larger populace, provide their salaries because they see it as "earned" and they don't see the need to answer to US because they have Union leaders and government management and bureaucrats telling them that they don't.  They feel untouchable because laws are written to protect them.

That's why they felt no remorse in turning Radnor Green upside down last week.  You see, until last week, when DelDOT stormed the neighborhood with dump trucks, pickups, flatbeds and front end loaders on a mission to rip out basketball poles that were too close to the road according to a questionable law passed in 2005, the neighborhood kids had enjoyed playing on their hoops almost every day.

Last week, all that changed when DelDOT employees stormed the neighborhood and yanked the poles.  Despite the plea's from the owners to leave the pole on their property, and a promise from a State Police Officer to the contrary, DelDOT workers removed the poles to their service center and demanded that residents (some of whom were not home when their property was taken) pick up their property from the DelDOT yard.  DelDOT is facing a $1 Billion shortfall within the next 5 years without spending cuts or revenue enhancements (toll/tax/fee increases) but for some reason, this was seen as a good use of tax payer dollars:

While this issue is FAR from over, this is likely the last time you will see much in the mainstream media about it.  Yesterday afternoon, the McCafferty family, who has led the charge to get their pole and hoop returned to them, discovered the grim reality.  Not only did the DelDOT workers lie, cheat and steal to get the poles, they also decided to destroy them.  Every single backboard was in one piece when it was PLUCKED from the neighborhood yet, every single one of them now is destroyed.  Here are some images of the poles as we found them yesterday:

Every single backboard has a hole in it, poles were damaged and the DelDOT employees couldn't care less.  As you'll see in the video below, they stood on the other side of the yard, smugly video taping as Rep. Bryon Short and I used our personal pickup trucks to transport what it took them 2 dumps, a front end loader, a flat bed, 3 pickups and 5 police officers to transport.  But then again, I do always say that the private market is more efficient than government almost 100% of the time.  I'll leave you with this final video from the crew over at the News Journal:


Update: Pastor Dowell is standing up to show that this is a national movement!  We've had ENOUGH of government employees taking liberty and property from people...and then pretending like it's just their job.