No, they won't go away, the damage is done. I wonder if the price of food was ruining the economy and farmers were making the insane profits that the oil companies are, Would somebody do something about that? The blatant inaction by our government on this deal really speaks volumes about who they are worried about. I wonder how we will pay for a war when about half of us are broke and out of work because of this crap. Go out and vote, I don't think anybody could be worse than this clown we have now.

 

Bought a new house closer to work

 

the farmers profit margin is no bigger on 3 dollar corn than it was on 1.90 corn. the cost of fuel, fertilizer and everything else has shot up.

the evening news should report profit margin of the oil companys and not say they make huge profits. there is a difference. if you have billions invested in a company to have small billions in profit doesnt mean its a great year. maybe washington should look at stop siding with sierra club and other global warming laws that are raising the price of gas more than any other influence. if they would let us build neuclear plants, drill some wells and build more refineries, reduce the number of different gas blends, each state pretty much has its own blends according to what the feds say it needs. why cant we have the same gas accross the board.

 

Oil is sold on the open market as a commodity, speculators drive up the cost of oil and the Govt can not do anything about it. If you want to live in a country where the Govt can dictate prices then perhaps you should try North Korea or Russia.

I for one am happy that our Govt can not control prices because if they could it would likely be $25.00 a gallon.

 

the way i look at it is that i love my truck too much not to drive it...there other things that i do that aren't a neccessary part of every day life that i can stop doing to save some money.....to each his own and everyone has different priorities

everyone has the right to express there opinions about the everything and that's what makes this country so great as well as DTR because you can totally vent on anything that matters to you

i will keep paying for diesel bc i want to keep driving my truck, i am sure people that bought the high mpg cars bc that was all they could afford are in worse shape than i am..

 

Our government can do a whole lot when you use words like collusion, tariffs, export taxes, monopoly and national security.

 

2003Ram,

The term "anti-trust" comes to mind. http://en.wikipedia.org/wiki/Antitrust

While it's clear this oil pricing is being done in the "open" markets, the big oil companies are the ones trading it, and selling it right back to themselves at a mighty nice profit.

Congress had a bunch of oil execs in yesterday to question them about current pricing. Alas, nothing will happen in response to these hearings, as they are just for show.

Back to the question, "what am I doing to save on fuel?" Well, I've been carpooling for a few years now, but the wife wants to get a VW diesel that gets about 45-50 MPG. That, and Jet-skiing less, driving less and finding tweaks for my vehicles that improve mileage.

garrett

 

sooo, is the Busa modified or stock. i just sold mine last Nov. still got the 750 to ride. i drive the Honda Accord to work since it gets the best 4-wheeled MPG and i'm trying to keep miles down on the Pacifica. yeah, i kn ow i don't have a truck, but even with the prices, i still want one. drove a cummins awhile back and got addicted. now i need one...just to have it. i had an 03 1500 that i miss, but that 4.7 was about gutless. sounded nice, but need a CTD. much better MPG than that 4.7. get this, goin 60-65 haulin 1 bike in the bed, 1 on a trailer, the best i got was 12 mpg. i figure, a CTD will easily smoke that and pull a HECK of a lot more. just my feeling.

plus, my brother just got 97 CTD a few months back. he loves it. with his lead foot, he still gets 17. sooo, by my reckoning, i should easily get 20 w/ my delicate foot.

 

The fact that so many people turn to the Gov't first says volumes about the level of understanding of the typical American consumer.

I don't like the high prices one bit. My truck is getting very little usage and it's because I'm trying to save money. But I accept the high prices because I understand what's causing them. I also understand that the gov't as a long track record of "fixes" that actually make things worse.

Here's an example from Economics 101 for those who didn't take it. Let's say the gov't sets a limit to how much a tenant can charge for rent for an apartment. Let's say this limit is substantially below the "open market" price of what that apartment would rent for. What is the effect on the market for apartments?

The effect is a shortage of apartments, and HIGHER rents! The people that could afford the more expensive price anyway will now compete against the people who can suddenly afford the apartment. This means there is now more demand for that same apartment than there was before. Since there's more demand for that apartment, there will be more demand for every apartment in that price range and cheaper. More expensive apartments will be unaffected. Because there is more demand for apartments at the rent-control price and below, all of the rents that were previously cheaper will now be more expensive.

So, that politician who got rent controls to bring a $1000 apartment down to $800 just made every $600 apartment more expensive. There's a housing shortage because we have a larger group of people now competing to buy the same number of assets, increasing demand and raising price.

Example #2 relates to a "price floor". Unlike the rent control example above (a "price ceiling") the gov't is dictating the minimum price of something, not the maximum. We saw earlier how a price ceiling raises prices towards that ceiling point. What does a price floor do?

An example of a "price floor" is the minimum wage. This is the "cheapest price" at which labor is available. Almost by definition, it means the market price is lower than the artificially set "price floor" (in this case, minimum wage).

If we set minimum wage at $8/hr, what happens to the labor market? Like other things of reasonable price elasticity, when price goes up, supply goes up as well, because of profit motive (suppliers have greater incentive to supply at a higher price). That means you will have a greater supply of labor at $8 than you had at market price.
But in this case, demand hasn't changed-- and when supply increase is driven by price and not demand, then you have an oversupply of labor, which we call UNEMPLOYMENT. The net effect is the opposite of the rent example-- there is downward pressure on all wages because of the artificially high price of the cheapest labor.

(there's also a relevant aside here about creating a black market for illegal workers)

The lesson here is common to both price floors and ceilings: when the gov't intervenes with price manipulation, it has the OPPOSITE effect compared to what people are told it will do. Minimum wage causes unemployment, and hurts the poorest people rather than helps them. Rent controls make housing harder to get and make rent more expensive, not cheaper.

The last thing you want in the case of oil pricing is ANY kind of gov't intervention in price manipulation.

There are interventions which would be beneficial, in the form of CAFE requirements and such-- but these only indirectly affect the price of oil by influencing aggregate demand and the rate of growth relative to growth in supply.

JUSTIN

 

You make a very good 101 argument in economics. However in this time the book is being re-written. The future traders are alone responsible for the price increases. Supply and demand is no longer a valid economic principle as it once was. Future contacts in Chicago and New York have unbalanced the markets. Unregulated speculation is out of touch with the old economic law of supply and demand. Eventually the speculators will tap out on oil as evident already and are moving on. Lately grains, corn, soya etc. are going thru the roof. Remember the dam crop is not even grown let alone harvested! The only thing that will slow these greedy speculators if we stop buying Asian goods. Don't buy from walmart or any china mart for starters. Remember the last Asian recession and the price of crude? We have more than enough crude oil and raw minerals on this cont intent for our prosperity, THEY DON'T

 

Amen, N.Johnson.

This crap about supply and demand are being drummed up by folks making big bucks off of you and I. If it's a matter of supply and demand, how come ZERO gas stations in the US have closed due to lack of inventory? It sure happened in the 70's.

Sure, it's a matter of supply and demand. They supply the fuel, and now they're demanding more cash for it.

garrett

 

HOHN & N Johnson, you are both right. The only efficient way to determine value is through the market, and the worst possible solution is for government to get involved in setting prices. Futures speculators are gambling that demand will continue to go up and that prices will continue to rise on oil. Their speculative purchases are driving up the price of oil above the level justified by current demand and costing us all a lot of money. The appropriate responsibility of government in this area (ala good old Teddy R) is to make sure that the markets are not manipulated in any way.

 

try walking it is good 4 u

 

I work in the oil field. I get my diesel for free. I built an 80 gallon toolbox tank and plumbed it strait in to the bottom tank. I get about 120 gallons every other week and have a range of about 1500 miles. I cant remember the last time I filled up at the pump.

 

Thanks for the help.