http://blogs.forbes.com/johntharvey/2011/04/26/why-you-are-paying-so-much-for-gas/

He makes a good point, the instability in fuel prices started right after the deregulation of the commodities market. So instead of the fed grandstanding they should be pushing to regulate the commodities market.

Lets re instate the regulations on those markets.

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2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Pretty much.

(Increased world demand had an impact but it was probably slight)

Point to one instance in the past ten years where there was a lack of oil like in 1973.

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1982 300GD Carmine Red (DB3535) Cabriolet Parting Out
1990 300SEL Smoke Silver (Parting out)
1991 350SDL Blackberry Metallic (481)

"The thing is Bob, its not that I'm lazy...its that I just don't care."

Demand should have an affect on oil prices but its slow, oil doesn't go up like we have seen because of demand.

Factoring in demand and inflation it should only increase a few percent a year.

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2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200

It's those damned speculators. It's also a bubble, and it will pop. However, as the US inflates its currency into oblivion, prices will still go up. As the US dollar becomes less desirable to have, it will cost more of them to buy gas, etc...
There is a possibility that you will see the price of a gallon of gas go to $30 a gallon. But, by then, a loaf of bread will be $15-18.
Interestingly enough, one can still take a canadian silver quarter, sell it to a bullion dealer, and within a few cents, have money for an imperial gallon of gas today. In 1967 when we were still minting .800 silver quarters, an imperial gallon of gas cost a quarter or 0.125 tr oz of silver.
It's not that gas is getting more expensive, it's that the fiat paper US dollar is becoming worth so much less as it is being inflated to it's natural value, which is 0.
Today, the US dollar is worth about 2.72 cents of what it was worth in 1970.
It's my opinion that the US is trying to inflate the dollar to nothing and replace the currency with a new one to get out of debt. when that happens, and you take your 'secure' US gov bonds to be cashed, you will hear something along the line of, "I'm sorry, Sir, but we don't have any of these US dollars you speak of, and we cannot pay you...."

Now, if you're up to your eyeballs in debt, you might want to buy a small US bond, and tape the gov or whoever's reaction to the bond to be used in court should they take you there for nonperformance on your loan. Could be entertainment at it's finest....

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All it takes for evil to prevail is for good men to stand by and do nothing.

Too many people tip toe through life, never attempting or doing anything great, hoping to make it safely to death... Bob Proctor

'95 S320 LWB
'87 300SDL
'04 E500 wagon 4matic

Nonsense the US is not up to its eyeballs in debt. Every first world country took a major hit because of the recession and had to accrue significant debt. Ours is slightly high but still at a reasonable level, compared to say every country in Europe, and Japan. Which if you look have far more debt than we do and the world hasn't ended.

This economic end of the world nonsenses is distracting from the real issues and getting tiresome.

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2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200

I never said end of the world. Just a sharp and quick change. Happened many times before... Will keep happening. It's a cycle... Nothing more, nothing less... I'm not preaching end of the world.
I do however believe that the next 2 years will be very interesting.
BTW, the reference to up to your eyeballs in debt was a personal debt reference, not a reference to national debt...

__________________
All it takes for evil to prevail is for good men to stand by and do nothing.

Too many people tip toe through life, never attempting or doing anything great, hoping to make it safely to death... Bob Proctor

'95 S320 LWB
'87 300SDL
'04 E500 wagon 4matic

Youre right. Just up to it's chin.

- Peter.

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2021 Chevrolet Spark
Formerly...
2000 GMC Sonoma
1981 240D 4spd stick. 347000 miles. Deceased Feb 14 2021
2002 Kia Rio. Worst crap on four wheels
1981 240D 4spd stick. 389000 miles.
1984 123 200
1979 116 280S
1972 Cadillac Sedan DeVille
1971 108 280S

Well he's coralating historical events and using them to state why todays prices are wrong. But he supplies no evidence except this is how it happened in the past so it should happen that way today.
College edecation vs real world studies.

Not saying I don't disagree that speculators are part of the problem, I'd say 5 or 10% of the rise.

Many manufacturing processes, refining, are doubly affected by inflation. The cost of the raw material and the cost to refine it are both rising. Add in the extra costs of EPA regs, government regs etc too.
The supply of the raw material is 'stable' but refining capacity hasn't changed much in 20 years, no one has built a new refinery in decades.
Another discussion on it's own.

Turmoil in the oil producing countries is having an affect.

Developing nations (such as China) are increasing demand at very high rates.
Our demand is flat to declining.

The dollar, let's compare the fall in the dollar vs the rise in gasoline prices, was the dollar getting crushed in the time periods Prof uses for his comparisions.
Maybe their are other factors, ignore those that don't support his position, duh.

Speculators, eliminate them, let's make sure we know what will happen.
Without speculators would you buy hundreds of millions of dollars of oil to refine, not knowing what it will be worth 6 to 12 months out when the product is ready.
If you were worried the price would fall, you'd shutter your refinery, causing further problems.
Would you sell that oil without protecting some of the currency risk, you would have to eliminate all speculators currency as well.

Then of course government meddling or whatever you want to call it.
Backing of various alternatives, none of which have really made a difference.
The government should NOT subsidize the production of alternatives, but back research into alternatives. So far all the backing has been boondoogles (IMHO).

There's a start from an amatuer economist, I could probably come up with at least a couple of more points why this guy is selling his degree, not doing real world research.
Speculators are part of the problem, but there are many other issue's.

Disclosure, I am a speculator, not in oil or gasoline but currencies and stocks.

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KLK, MCSE

1990 500SL

I was always taught to respect my elders.
I don't have to respect too many people anymore.

Translation: I use your money to make my money and create nothing and do nothing of real value while doing this: yet I think nothing wrong with this. I don't believe this is assisting in the downward spiral of the USA at all, and more people should be as smart as me.

Between 1920 to 1964 a gallon of gas cost a quarter.

During that same period of time the quarter was 90% silver. That is our currency was tied to a tangible commodity, precious metal.

Starting in 1964 the silver content of coins was drastically reduced. The currency was separated from any real asset. The Fed could and did print money whenever it wished.

Today, if you had a quarter minted between 1920 to 1964 and determined the current market value of silver in the coin it would buy a gallon of gas.

The single greatest cause of elevated gas prices, much less the rest of the deterioration of our nation (US), is the refusal to control our spending and to therefore print valueless money.

It's not the Arabs or Chinese who are injuring us. We're doing a fine job all by ourselves.

That was another point I read the other day, I couldn't find the details though.

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KLK, MCSE

1990 500SL

I was always taught to respect my elders.
I don't have to respect too many people anymore.

You can't have a modern currency based on precious metals, no developed country is seriously considering reverting back to the gold standard, it would cause major problems.

Silver like gold and oil are currently in a bubble.

Just because X amount of silver equals a gallon of gas doesn't mean their was inflation of X amount over that period.

Also remember that back in 2008 during the last fuel run up the price of silver was roughly $11 an ounce, so your comparison wouldn't have been relevant three years ago.

Lets put it this way, just because a 560SEL cost $45k in 1987, and a new S550 costs $98k doesn't mean their has been massive inflation in the past couple of decades. For starters your not comparing equal cars, the modern vehicle has more stuff in it and costs more to produce.

I'm not saying that the price of fuel shouldn't increase, it should. What I'm saying is the current increase isn't because of natural market forces and is being forced on the market by a relatively small group of businesses and individuals. Oil prices should go up a few percent a year to take into account inflation, increased demand, and regulations. Not 100% in 12 months.

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2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Speculators keep markets healthy and every serious analysis indicates they lower prices.

Markets are simple (yeah right). People try to legally maximize profits. NOTHING in human history has generated more wealth and freedom than free market exchange.

Blame others all you want; the fault is solely ours. We vote these idiots in. We ask for incompatible goals. We get fat, lazy and ornery.

If this nation would get off its ass and get to work we could be great again. But after 50 years of being wimps it doesn't seem likely.

The oil commodities market was partially deregulated meaning we individually can't enter in, but a few big investment banks can because they were granted exemptions by the SEC. That along with a deflated dollar is why we are paying so much for fuel. I read a great article about the exclusive deregulation of that market not too long ago. If I can find it I will post it here, however I'm pretty sure it was you guys who introduced me to it.

However oil is a terrible thing to be burning anyways. Like we've been saying for years we need a better alternative.

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-Typos courtesy of my mobile phone.

Please do not edit the quote to only show what you needor maybe just what you read, much like the Prof picked his stats.

That translation is yours, your opinion and may or may not be the correct translation.

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KLK, MCSE

1990 500SL

I was always taught to respect my elders.
I don't have to respect too many people anymore.