America: The Best Government Money Can Buy

These gas prices are kicking all of us in the rear end. Many blame the President, others commodity market speculators and still others OPEC. But they all are off from the way I see the issue. The real issue and the culprit is the US dollar. Specifically, its reduced value and purchasing power.

It seems almost intentional, avoiding the declining value of the dollar for the pricing increases we are seeing in everything from oil to food to gas. Politicians seem to just want to exploit the issue by appealing to popular sentiment. The fact is that the US dollar continues to hit record lows against all major foreign currencies especially the yuan, Euro and the Yen. Add to that the recent IMF findings that China’s economy will surpass that of America in 2016, it is more that meets the eye when speaking about the rising cost of gas. Why? Because we are not going through a recovery as the government suggest but rather a debt spending boom based on the home buying explosion of years past.

Truth is US household debt reached a high in June of $8.7 trillion, and with rising unemployment and no economic growth, it is reflected in the reduced value of the dollar. Such impacts negatively US Treasuries especially since now the Japanese government will need to sell its US Treasuries to deal with and pay for cleaning up and rebuilding after the Earthquake. Add to this gumbo China, which has the largest dollar surplus in the world, saw it foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.

Now back to oil and gas. In simple terms, the weakness in the US dollar is causing everything to go up. This in an environment in which the rate of new debt growth among families is growing and the overall US manufacturing economy declines. This inherently impacts the dollar since what politicians ignore in their budget and deficit battles is the fact that US trade deficits and the Dollar System are connected.

Historically, in 1944 the Bretton Woods agreement solidified the dollar as the preeminent world reserve currency, defining the dollar in value to be 1/35th of an ounce of gold. In 1971, when President Nixon refused to pay out any of our remaining 280 million ounces of gold, he made the dollar what is today.

Oil is a critical economic and strategic resource and since it is traded in US$, when the US$ weakens, in terms of any other major foreign currency, the countries exporting oil get less. Thus when the dollar goes down in buying power they ask for more US$ for a barrel of oil. This gets even trickier since there is no shortage of oil via production currently. But what they see is our economy, let us say compared to a China which by estimates will expand from $11.2 trillion this year to $19 trillion in 2016, while the U.S. economy will rise from $15.2 trillion to $18.8 trillion. Strange, since it was just a decade ago when the U.S. economy was three times the size of China’s.

All I am trying to say is that the America we once knew with the all powerful dollar bill isn’t the same. The fact is that we have a surplus of oil and that we are not refining gasoline/ In addition, what we are seeing is the impact of a weaker dollar on oil demand in non-dollar economies. Oil producers sell their products in dollars. The dollars they get are used to buy other stuff around the globe. If it cost them more dollars to do so then they have to sell their oil for more dollars.

And as long as the U.S. Dollar is continuously devalued (inflated) by Federal Reserve and U.S. government monetary policies, oil producing nations will lose money if they don’t raise the price.

Yep the problem is our government and our monetary policies. The dollar may never be the same. Yet all the time wall street, big oil companies and politicians are getting richer as the sell all that made America great away to corporations and other nations through our monetary policy. Yep, that’s America; the greatest and best government money can buy.

200$ in two

First, I wanted to say Jones here been having PC problems, not to mention I had 6oo pounds of dog food delivered to day for my store. I was trying to post this yesterday - Jesus wept. So Marcus ( i still aint on yo blog roll folk), yep I read post and left a comment, or so I though. Second. I have added a new button to the top left hand side bar that read SBM MUZK. Yep, your folk her make music, proficient in lead vocals, bass, guitar and percussion and some keys. We call it Funktry Muzk (funky country music). All live and impromptu with folk playing what ever instrument is available. One date it and move on to the next song. Been making music like this since 1984 and my goal is to put up all 7000 or so songs amassed or as many as this site allows.

Any who, since a black man broke, I have been ruminating on the state of gasoline. The strange thing is about 10 years ago we did a song called GAS HIGHA DAN A MUTHA FUKA.

But I really believe that in the next two years the price of Crude Oil will be hovering around $200 a barrel. Why do I suspect such? Well several reasons. The first is the weak and inflated and the non-recession proof dollar. The second is based on folks who hate us with a passion like Venezuelan President Hugo Chavez. Jones be talking like a real trooper, but I can’t blame him, I mean if I hated a country with a passion that basically treated my people like step children, I would use oil as an instrument of war also (African Nation take a hint).

Now I’m certain that we may be able to buffer such a price if we sought other fuel sources or did not attempt to invade another arab countries (IRAQ). Although I think invading Is an impossibility under new leadership with the Exception of John McCain, GWB, may decide to do such if he aint got no blow to toot.

Yep, and the concern is that it may be an option if the current president of these United States of America desires to flex his geopolitical muscle. We have insisted on such by having policies (NAFTA, repealing Glass-Stegall) that have aided in the fall of the dollar - declined by about 15 percent in 12 months. And OPEC nations know this. Why, cause they losing loot. If OPEC takes this approach, then I figure the only thing next is the fall of the US economy. I mean let us be for real, oil was about$40 a barrel in May 2005.

This means no more me and you if you asked me, which you didn’t, the end of the middle class for real. But then again, I’m just a mutha fucaka who thinks, who reads and is cursed with an IQ of 185 as if it means I cant count to 186 - but ton’t worry, I made 690 on my SAT. But it is hard not feeling like Magnentius, who in 365 (or was it 350 , I forget) ACE who was proclaimed of the ruler of the Roman Empire after the assignation of Constans, when he felt like he was the shit. I hope I am not the shit and what I postulate remains mere rumination.

Peg & petrodollar warfare

Growing up, as now I am and will forever be a music buff. Outside of Funkadelic, Prince, Led Zeppelin and the Almon Brothers, Steely Dan was one of my favorites. Now we aint talking about individuals, cause that would mean Al Green, Nina Simone, and Dinah Washington among a whole lot more folk would have to be included. But that’s not the point; the point is the song Peg. The lyrics I like the most are inn the chorus:

Peg

It will come back to you

Peg

It will come back to you

Then the shutter falls

You see it all in 3-d

Its your favorite foreign movie

Rumor has it that Iran is about to change what they and the world have traditionally peg the price of oil on (the US Dollar) to the Euro and the Yen. In all honestly, I hope they do it while GWB is in office because I would hate for it to fall in the lap of Obama (for obvious reasons) or in McCain’s (it may proffer a myocardial infarction). This makes it so clear to me as to why these political big wigs and Neo, neo cons are always at the fence throwing rocks at Iran. This will be more fucked up to the US than anything Saddam Hussein could have done. Not to mention he was on our payroll when he poisoned the Kurds and the Iranians.

If this happens it will be on, petro dollar warfare. Talk about divide and conquer, if this happens Europe will once again be king if it unit of currency becomes the standard for the rest of the world (yet another reason why I ridiculed McCain in the previous post regarding his restricted understanding of macroeconomics).

Any proactive government would have been able to see this coming and maybe even would have tried working hand-in-hand with OPEC and the European Union to put in place some type of dual currency system. But no, not our slow ass, pass the TV to change the channel to find the remote control ass. This may be why some have openly considered that ‘Operation Iraqi Freedom’ occurred so we could put a pro-U.S. puppet government in Iraq, with military bases and all, right before “Peak Oil” production could occur. I guess to them, it was easier to procreate a war fabricated on a make believe WMD program so we could get some practice in before we did the same thing to Iran.

Damn, that’s some tight shit. I guess the lesson to be learned are several First, I cant be mad at a nation who selects a president with a PhD don’t sleep on PhDs, that’s what President Mahmoud Ahmadinejad is, for he is smarter than ours. Also, our leaders again have failed us, and like me and the rest of US, until the dollar is back where it belongs, we gone be singing them lines to that Immortal Steely Dan Song. Especially the part about Iran, being our favorite foreign movie. Jesus Wept.