the ongoing surge in the price of food, energy, and other essentials
Eric LaMont Gregory
As the economic slump in the United States continues apace, and although Americans are using less oil and gasoline the price at the pump keeps climbing.
Four factors are contributing to the rise in price; wars and rumors of wars (remember how the stock exchange started in the cafes of London), profits in the exchange traded funds and resource sensitive stock market, simultaneous fall in domestic demand while US refineries increase exports, and the fact that the oil business is a business and is run like a business which uses its economic clout to get what it wants to further its business interests.
The most important thing the oil companies do to further their business interests is to exercise clout. Clout comes from the fact that they can take as much money out of the American economy as they deem necessary on any given day.
This ability can derail any and all attempts by the government to grow the American economy through economic policy strategies or even monetary policy initiatives. The ability of the oil companies to increase prices at-will, that is, to levy a tax as it were, on everything and everyone is the ultimate economic power, remembering, that 'the power to tax is the power to destroy'.
Gasoline and diesel products supplied to the US domestic economy are down about 7% from the same time a year ago.
So with American demand falling, U.S. refineries are exporting 3 million barrels of diesel and gasoline products each day to countries like Mexico, Canada, Brazil and China.
Makes one stop and think about the fight over the Keystone Pipeline and whether that oil was meant for domestic use to reduce our reliance on foreign oil? Or, was the hype over the pipeline more to do with jobs along the lines of the automotive company bailouts.
We are net exporters after all.
Current US exports of petroleum products, mostly gasoline and diesel, exceed imports by some 500,000 barrels a day, in contrast to 2006 when the US imported nearly 4 million barrels a day