Feb 24, 2012

Gas is cheap

You just put $75 worth of unleaded in your little car. You cussed the Arabs and the Africans and the Venezuelans and the Texans. When we get the pipeline from Athabasca you'll cuss the Canadians, too, eh?

Wrong targets, Bunkie. Your enemy isn't wearing a turban, a sombrero,  or a Stetson. He's wearing an Armani with real button holes in the sleeves. He's  carrying an alumni card from a great university and impressive  government identification documents.

He and his forebears arranged this fiasco more than 40 years ago when our masters thought it would fun to divorce currency from any objective standard. It happened to be gold, mostly for reasons traditional and sentimental. It could just as easily have been copper, lead, bauxite, or any other useful physical substance which is more or less scarce.

It isn't like we absolutely need another reminder of this, but it can't hurt.

Forbes writer Louis Woodhill offers some mathematical evidence. It's worth a look even if your eyes glaze over at a sequence of funny little symbols and more zeros right of the decimal point than you care to deal with.  Because? Because he arrives at a conclusion which has been pretty plain to libertarian types since we all decided that the difference between  Republicans and Democrats was about the same as that separating Gotti and Castellero.

"At this point, we can be certain that, unless gold prices come down, gasoline prices are going to go up—by a lot. And, because the dollar (and virtually all other currencies. J.) is currently a floating, undefined, fiat currency, there is no inherent limit to how far the price of gold in dollars can rise, and therefore no ultimate ceiling on gasoline prices..."

And gold prices aren't going to come down, are they? At least as long as our presidents and our congress are so gleefully in love with fiat money, the world's most overwhelming SuperPac.  Bridge to no where? Great idea, Senator. How much do you need?  

Right now, the threat posed by rising gasoline prices is not just to family budgets. An even greater danger is that the government will use escalating oil prices as an excuse to do something stupid.

That constitutes my major quibble with you, Mr. Woodhill.  The correct phrase would be, "as an excuse to keep doing something stupid."

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