At the start of the Iraq war... oil was around 30 bucks a barrel. Anyone remember what gas prices were? About $1.50 per gallon depending on where ya lived.
What about now? Oil is over 100 bucks per barrel... and gas is 3 bucks a gallon.
Can we PLEASE invade Iran? That way we can go ahead and get oil up to about 300 bucks per barrel and gas would got up to say...6 bucks a gallon. That would be awesome!
Hey but wait a second... these numbers look a little wierd. How come the price of gas only went up 100% while the price of oil went up more than 200%? Wow... these gas companies must really be hurtin' these days... skrimpin' by as best they can to keep their prices down. But... well no... that's not right... I mean they've been reporting record profits.
What's the deal?
Some of you know where this is going... but not all... and that's why we're going there today. Here's the deal folks... deep breath now... the price of oil is not related to the price of gasoline in the US... other than giving the gas companies and excuse to raise the price artificially.
How can this be possible?
Simple. Gas companies don't ever really pay for the oil they use. At the begining of each quarter they tell the US government how much oil they need to buy... and the government promptly prints up how ever much money they need... and they go buy their oil with it. At the end of the quarter... they give the money back to Aunt Samantha.
Wouldn't it be nice to run a business in such a fashion? Its a shame we can't all get that sweet of a deal. But here's the problem... the more the price goes up... the more they have to print... and the more they print.. the less each dollar is worth. That's the definition of inflation. This inflation is in addition to the other rampant inflation caused by magicly printing up money to cover the teetering housing market... which has been propping up the teetering... Everything Else market.
Seriously... we're rapidly approaching the day when the dollar isn't worth what it costs to print it.
Ah... but what's that got to do with oil?
Glad ya asked.
See... this whole thing works as long as oil is priced in dollars... because of the natural lag between the creation of new dollars and felt inflation. Ahhh.. but what happens if you price oil in Euros?
Well... remember back in the nineties when russia dumped a third of its paltinum reserves? What happened to the price of platinum? It instantly dropped through the floor. See that word? That word is "instant".
Instant means... no lag time. Instant means we couldn't just print up money to buy whatever we want. In short... instant is bad... really really bad.
And what is Iran doing?
They are pricing their oil in Euros... and trying to get the rest of OPEC to do the same. We can't let that happen. So we'll invade them.... kill them... and screw up the oil supply for the whole world even worse.. at the same time China is ramping up demand.
But no... that's not really it... we're really invading them because they might get nukes... you know... just like we invaded Pakistan to keep them from getting nukes. Just like we invaded North Korea... and India.
But they're terrists!!!! And they hate us!!! They hate us for our large American penises!!! The US always has a noble cause to go along with its chosen war... of course... the cause and the war needant actually have anything to do with each other. They just need to sound good together.