I am Angry

I am angry because it appears no one knows what is going on around them with deficits, rising fuel prices, Islamic radicalization, and Middle East uprising. The most twisted issue is an American society willing to tax food, clothing, and shelter, at the same time as supporting 44-million Americans on food stamps all while watching media celebrities like Charlie Sheen make fools of themselves. It cost an extra “Andrew Jackson” to fill my car today and the mainstream blames fuel prices on the Middle East, but that's far from the truth. A middle-school look at the readily available data shows a more fundamental reason for the rise, one destroying our lifestyle and future.

Rising fuel prices are simply attributed to three factors: monetary supply, supply and demand, and speculation. Speculation is based on fear in the market which is driven by political unrest around the world. Supply and demand is a direct consequence of emerging economies, hurricanes in the Gulf, or destruction of Middle East oil assets. Although the Middle East uprisings are dominating news reports daily, the current rising prices are truly a function of monetary supply. Fed Chairman Ben Bernanke speculated on QE2 in August 2010 and it was officially announced November 4, 2010. Each week I graph crude oil prices and up until August prices were relatively stable, but immediately following QE2’s speculation fuel prices started to rise, increasing more after the official announcement. With the devaluation of our currency, OPEC announced a desire for higher fuel prices to effectively capture the same income. Today’s Middle Eastern uprising is a secondary issue exacerbating the underlying cause of rising fuel prices. Blame our government and central bank, not those fighting for civil liberties.

The solutions being thrown around by political pundits from both sides make no sense and demonstrate politics’ need-to-please, not realistic solutions. Opening strategic reserves is anecdotal to a giving a cancer patient a band-aid. “The Long Emergency,” as James Howard Kunstler writes, has begun and political unrest, failed monetary policies, and a third-world desirous of the same excesses we enjoy will continue to drive oil prices upward. I am angry pop-culture nonsense Tom Brady’s hair and Gaga’s breast milk ice cream exploits resonates more importantly than the collapse of our currency. On November 10, 2010 I wrote, “Gasoline should easily reach $3.40/gallon by April as OPEC is demanding a minimum $100/gallon.” I am angry no one listens.