Oil Shortages...? 04/12/2005

Wow. What the hell happened? I log onto diaryland and my computer speakers cough a bunch of dust into my face.

Whoops.

I'm sure you've figured out what happened. All the time I used to spend writing is now spent trying to make extra money so that I can afford to fill up my gas tank.
Not a bad guess.

Actually, I've been writing. A lot. I finished a play and am working on another one. To be produced soon.
As such, most of my wit has gotten sucked up into other venues, and I've become completely neglectful of this poor page.

Sorry.

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In other news... I think I figured something out...

Gas prices are getting ridiculous, right? And everyone blames OPEC and the rising prices of foreign oil.

Except I don't think that's the real problem.
Yeah, the price of oil has risen, but not at the sharp spike you'd think. Just change your perspective and roll with this one for a second.

Over the past two years, the price of oil in America has risen about 30 percent... from $30.13 to $42.91 a barrel (as of Feb 1).
Outrageous, no? But has the price of oil really risen, or has the value of the dollar taken a plunge?

Ooh... look. The price of oil in Europe has risen only 9 percent in the past two years. That seems to be a little more natural sense of inflation.

Why the disparity?
The Euro is actually a more stable form of currency. Over the same period of time that the cost of oil rose 30 percent in America, the value of the Euro rose 21 percent against the dollar, from .93 Euros to the dollar to .77 Euros to the dollar (as of Feb 2005).

It's a commodity problem. Oil is priced in dollars. As the value of the dollar drops, the price of oil will rise. It doesn't cost any more than normal, we just have to pay more because our money doesn't count as much as it used to.

And it looks to be getting worse. Wall Street analysts are saying that before too long, oil will hit $100 per barrel... but what it really means is the dollar has dropped in value by 50 percent.

Of course by that time, OPEC will see how stupid it is to price oil in dollars, and switch to the Euro or the Yen (Japan). And when that happens, there won't be much of anything left to keep the dollar little better than Third World Currency.
Then we're really fucked.

And why has the dollar dropped so bad in value? Hmm... massive deficit. Massive war-spending. Increasingly acclerated trade deficits. Oh, and billions in tax-giveaways to corporations.

What's that? Instead of blaming foreign oil we should be blaming the Bush Administration?

What a shocker.