Tuesday, August 04, 2015

Bazzo Says: Oil's Well That Does Not End Well

Bazzo Says:
BY ANTHONY J. BAZZO

OF YORKTOWN NEWS & MAHOPAC NEWS


My source for all things economic is not Kudlow or Kramer, though they are both pretty good and usually more right than wrong. However, when it comes to the nuts and bolts of the economic figures the state and federal government throw at us each month, no one is better than John Crudele at making the internals (how the numbers are arrived at) understandable. You can find his column every Tuesday and Thursday in the New York Post business section. Also, every Sunday he does a Q & A called “Ask John,” again in the business section of the New York Post.

 

Case in point. I remember that it took oil to reach over $100 a barrel for pump prices to hover at $3 a gallon. In fact, as far back as 2007, when oil was $51.50 a barrel, the pump price was between $1.80 and $2.30, depending on where you purchased your gas. For the record, I am only talking New York prices in general and Westchester prices in particular. 

 

Crudele’s column in the July 30 edition of the New York Post—"My Crude Thoughts About Gasoline Prices"—explains why even though as of last week oil was selling for $51.68 a barrel, pump prices were between $2.89 and $2.99 a gallon. 

 

Again, for the record, I attributed this to inflation caused by this administration’s policy of "quantitative easement." Quantitative easing is when the U.S. Treasury Department prints money and uses that money to buy back government bonds, keeping interest rates low so banks can lend that money to investors who then buy stocks. This keeps the market at levels that would not exist in a real market. Yet, for the benefit of low information voters, this administration uses these market numbers to fool them into thinking the economy is bouncing back from the recession. When a government prints too much money it devalues that money and then inflation ensues. 

 

You can see this firsthand when you go shopping for meat, fish and produce. We are told these prices are attributed to other influences, however these prices have been climbing for at least the last five or six years. This is also why the official government figures on inflation are inaccurate. The figures do not include—purposely—the price of energy or food. This is because Social Security increases are pegged to the rate of inflation, so by not including energy or food, Social Security increases are kept artificially low.

 

Getting back to gas and Crudele's column, I had been under the impression that the real reason that gas prices are high was because of inflation or because investors were rigging the commodities market, running up the price of oil based on their false premise that we are on an economic upswing. These wizards of smart foolishly believe the government numbers and that is why they are always surprised when new figures are released. Also, because of cheap interest rates they use this borrowed money to invest in the market. 

 

However, reality always sets in. We are not in an economic upswing, and people do not have more disposable income because of this supposed upswing. If anything, there is a little more disposable income due to the decrease over last year in the pump price of gas. Now these investors are having a hard time running up the price oil because if hydraulic fracturing (fracking). This has increased our ability to retrieve our fossil fuels that were previously thought to be irretrievable. This has caused a glut of fossil fuels, (natural gas and oil) meaning we have more supply than demand. 

 

The increased use of fracking has also made us less dependent on Middle East supplies, so market prices are not as easily affected every time a Sheik farts. This is why these anti-fracking zealots and their false scare tactics about the horrors of fracking are a real danger to our national security. Our governor is one of the worst offenders. 

 

So, why are prices now higher than they should be in relation to the price of a barrel of oil? This is what hurts. As a believer in the free market, I am ashamed to say it is big oil itself that is screwing us. They are keeping the pump price high for their bottom line because they became addicted to multi-billion dollar profits at the end of each quarter. 

 

According to Cruldele, in 2007 and 2008 (with Bush in the White House) barrel prices hovered in the low 50s and the pump price was 70 cents a gallon lower than it is today. That is 70 cents every gallon coming out of your pocket and going to big oil. Seventy cents a gallon you are being screwed out of. Now this is where our federal and state legislators should be screaming about greedy big oil. They sure did back in 2007 and 2008 and at that time they were wrong! Now, with a Democrat in the White House, when it actually is about corporate greed, they are silent. The question is: Why?.

This is what I say. What say you?

Source

• "My Crude Thoughts About Gasoline Prices"

pressreader.com/usa/new-york-post/20150730/282656096160824/TextView
 
 
VOLPE/BAZZO REPORT:
 
Guests: Darren Rigger, Bruce Apar & Bryan Fumagalli Discusses The Issues Wednesday 9:30 p.m. Channel 74 August 5 & 12 (Yorktown)
 
Guests: Authors: John Curran, John Morabito & Guest Host Darren Rigger Discuss The New Book "The History Of Peekskill Street Names" Wednesday 9:PM  August 5 channel 15 (Peekskill)
 
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