It is all about PERCEPTION

I wrote earlier that there is less gas and fuel being used because there are less miles traveled by personal and business vehicles.  You are driving less miles because of the cost of gas, and transportation companies are putting on less miles because there is less freight to move.  Companies are producing less, shipping less and consuming less.

To some degree it is  difficult to understand why the stock market is still holding so high compared to the feeling that the economy is staled.  Some say jobs are being created, businesses are hiring.  That will be true because there was a lot of cutting done because the profitability issue the last couple of years.  Now that they have tightened their belts and cut the fat from the overhead, they are willing to expand with the savings they have been banking. But the true fact is, there are still fewer jobs today than there were when Owe-Bomb took office.  Inflation is up, unemployment is up and the regulatory burden is up. 

There isn't a lot of new business, some, but not steady.  It seems to go in spurts.  Good for a few months, then slacks off for a month or two. Cars wear out, spring brings out the desire to beautify, maintenance needs to be taken care of.  Factory equipment breaks down, technology changes, bringing the need for updating.

So, how long will it last?  .... the perception that all things are good, unemployment going down, stock market going up, interest rates low, is created by the government by doing the one thing they can do... keep interest rates low.  As long as there is the perception, they have a chance.  It is when that perception starts eroding that things will fall apart.  This is keeping our dollar weak.  Who wants to invest in low interest bearing CDs?  Money flows where interest rates give a decent return.  That is not here.

If business was good and the demand for gas was up, that would mean the price of gas would go up. For example, gas prices went up this last weekend as much as 20cents in some places... then two days later this report shows up. That is built on perception. But Salon.com says, The recent gloomy forecast is putting pressure on the price of oil, which has fallen by nearly $32 a barrel, or 29 percent, since its high of $109.77 on February 24.  We aren't seeing that at the pump in most places.  Where did these gloomy numbers come from?  Unemployment, housing starts, inventory reports, new orders all are being spun as showing improvement, but most are revised toward reality in the next report.  Remember... it is all about perception.

StockMarketWire.com reports

US commercial crude oil inventories increased by 2.9 million barrels in the week ending 15 June.

Both finished gasoline inventories and blending components inventories increased last week.

Propane/propylene inventories increased by 1.3 million barrels last week and are above the upper limit of the average range.

Total commercial petroleum inventories increased by 11.1 million barrels last week.

You know the suppliers are having a hard time because of lack of volume. So their answer is to charge more money.... so we do the only thing we can do faced with real world problems... we quite using it as much as possible.  Why do we have to put up with such?  Maybe we are not being heard.  How much louder do we have to say it.... we are hurting and are tired of the shafting!

Are we going to wake up and demand that this administration actually do something other than destroy our economy via spending, regulating and lying?

From Iowa
The President

The Oil Price Agenda

 No one cares about the price of oil....

Well... that comment may be a little broad sweeping... at least the ones in positions that can have an effect on it don't care.

Secretary of Energy Stephen Chu, delivered very revealing and stunning remarks in testimony before Congress March 1st.. When Rep. Alan Nunnelee (R-Miss.) asked Chu whether it’s his “overall goal to get our price” of gasoline lower, Chu replied, “No, the overall goal is to decrease our dependency on oil, to build and strengthen our economy.”

The OWE BOMB made similar remarks in New Hampshire saying, “We are going to be hearing a lot about how people have these magic three point plans to make sure you’re only paying 2 dollar gasoline … You know the plans I’m talking about: Step one is drill, step two is drill, and step three is keep drilling.”

OWE BOMB  told a crowd at Nashua Community College after touring the school's automotive lab,  "There is no quick fix to high gas prices and the nation cannot drill its way out of the problem.  The president claimed oil production is at its highest in eight years, that increasing oil production takes too long, and that oil is not enough."  As for the president’s push for alternative energy, those sources simply cannot stand the test of the market.  How long will it take for reasonable quantities of energy to be produced using algae? 

This is the same reason Bill Clinton used for not going to ANWAR drilling and adding something like 80 miles of pipeline to the current line to bring it to the lower 48. Bill said it would take 10 years to accomplish.  So, here we are 10 years later and we still haven't started because it would take too long.  Too Long is not an excuse, not even a reason, it is a cover up and cop out because they are afraid of saying what the real reason is... they don't want to, period.  Industry experts say it could be accomplished in 3 to 5. The last pipeline was accomplished in 3. 

So where does that leave you and me?

Paying the bill.

The economy falling apart, slowing down and stagnating in the basement.  What we are seeing going into March of 2012 is this very thing.  The OWE BOMB and his cover up media are giving us all the positive spin they can.  Touting things that have no meaning as evidence of a growing economy and not showing things like the durable goods orders dropping the largest drop in three years.  In how long?  Three years ago we were falling into a recession. Does that mean we are doing the same thing?  Of course there are other indicators we are ignoring... Actual consumption of diesel fuel since the trucks are not running... Here is a report put out by the American Petroleum Industry...

WASHINGTON, January 20, 2012 – Total petroleum deliveries (a measure of demand) fell 1.2 percent to an average of 18.9 million barrels a day in 2011 compared with 2010. Except for 2008, this was the largest drop in annual domestic deliveries over the past decade. December 2011 petroleum deliveries were down 5.9 percent from December 2010, declining to an average of 18.6 million barrels per day, the lowest level in 15 years. Gasoline deliveries showed declines for 2011 as a whole and for the month of December.

"The weakness in gasoline demand in 2011 reflected the overall weakness in consumer spending," said API chief economist John Felmy. "This carried through the year, with retail sales down in December and gasoline demand slipping more than four percent for the month."

Despite the decline in demand for refined products, supplies remained ample, with gasoline production for the year averaging a record high of 9.1 million barrels per day, up 0.5 percent over 2010. Distillate production at 4.5 million barrels per day was up 6.1 percent for the year. Refinery inputs fell by 1.5 percent in 2011 compared with 2010.

Total petroleum imports dropped 5.6 percent in 2011 from the year before. Although up slightly in December, crude oil imports for the year fell by 3.4 percent.Refined product imports decreased 14 percent for the year and were down more than 33 percent for December.

Total petroleum exports (almost all of which were product exports) were up 25.5 percent in 2011 compared with 2010.

Crude oil production rose 2.5 percent in 2011 to an average of 5.6 million barrels per day. In December, crude oil production rose by 0.5 percent to an eight-year high for the month. The total number of oil and gas rigs stayed above 2,000 for the month, according to the latest Baker-Hughes Inc. report, and averaged 1,875 for the year, a three-year high.

Crude oil stocks ended the year slightly up from 2010 and were at a 17-year high for December.Motor gasoline stocks were up in December 2011 from the prior month. Distillate stocks fell to a five-year low for December.

API represents more than 490 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America's energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

What happens from here depends on what we let this administration get away with.  Well we let them and their numbers dictate the attitude of the marketplace or will someone call them out on it and make them face the facts before it is too late and we end up with four more years of destruction?

Maybe we all need to be getting on the phone demanding  answers.  

From Iowa

Pres.  

Soaring Crude Oil Prices

It is interesting to listen to the media present their ideas of why the oil prices are going up.  So here is my understanding of what is going on.

Think about one of the most heard advertisements over the last 10 years... Gold is going higher. Higher... HIGHER.  Why is gold going higher... Because it is a hedge against inflation.  As the dollar becomes less valuable because the fed has to print money to purchase our debt... (oxymoron),   Gold goes up.  Gold is a commodity, and as the dollar value goes down, the price of commodities goes up.  That is the natural way of the markets.  So... crude oil is a commodity.  It is priced in dollars.  Like gold, corn, soybeans, wheat, beef, pork, orange juice, sugar, lumber and other markets.  All these markets are priced in dollars and traded on the open world market.  Because they are such.... they are open to investors and speculators putting their dollars in as a hedge against inflation.

It is not the investor and speculator participation that drives the price up as much as it is the dollar value.  The investors to some degree create a market place for the price fluctuation as well as making liquidity for moving in and out of the market, but they have a limited ability to push the market very far because of volume.  Volume and open interest shows the traffic of the market, and the number of contracts held open over night.  Contracts can be held for one day or for the life of the contract, but the contract has an expiration date and must be settled on the expiration date. Total open interest in the crude market is at the time of this writing down, not up.

Look at the chart below.  Crude oil prices follow the red and green line. The dollar index prices follow the double gray lines.  Reference to these lines is only to made to identify which prices belong to which market and have no relevance to this discussion otherwise.

What you see in this illustration is the reaction to market forces other than speculation.  If one wants to talk about real causes... it is directly related to the spending and economy created by the Federal Government.  The more money they spend that we don't have, the further these price fluctuations will go.

Put the blame where it is deserved... on congress.... email this link to everyone you can think of that has anything to do with government or you hear blaming the speculators for their involvement in these markets.  It simply isn't their fault.

Iowa White House President...