WayneH wrote: I wonder what Jefferson would have done with his oil reserves?
My guess would be that he would have developed them so that he could pay off his debts and buy more books. That man loved to read. Given a source of income other than his farm, he might even have freed his slaves which were the collateral for the debt he had incurred.
With the nation's reserves, he likely would have done the same thing. Allowed them to be developed and applied the royalties to paying of the war debt and then invested in national infrastructure with the proceeds.
The $46/barrel includes the capital costs associated with building the plants if financed over 30 years- the costs vary slightly depending on loan interest and economies of scale but it's all in the $45-$50 per barrel range.
The question is why are we not doing this now- just the threat of building these plants would affect the prices of oil and gas.
In the long run- releasing these reserves will do nothing to affect the supply demand curve- it's a temporary measure that will not last- and when it's over we will not have these reserves for a real emergency- so it's just a hail mary pass- the kind of stuff we are used to seeing from this leader.
I would save this move for a real emergency- not a "Oh my god I'm Obama and I might not get re-elected" emergency!
Chamber of Commerce slams Obama over oil release
Washington's most powerful business lobby panned the Obama administration's decision to tap the nation's strategic oil reserve Thursday, calling the move "ill-advised."
"Our reserve is intended to address true emergencies, not politically inconvenient high prices," Karen Harbert, CEO of the U.S. Chamber of Commerce Energy Institute, said in a statement.
Could it be that the administration is concerned about a double dip that is likely if oil prices continue to rise and is trying to stave that off? Wouldn't that be considered an emergency? It is more likely about the political aspects of this, but trying to play devil's advocate.
Could it be that the administration is concerned about a double dip that is likely if oil prices continue to rise and is trying to stave that off?
Yes I think we are headed for a double dip- I have always said this is what caused the recession in the first place. $140 oil - however short it lasted- was the domino that led to the financial collapse.
I think Obama cares less about the economy than he does his own political ass- but if he does care even one bit about us- he'd be killing two birds with one stone.
Interesting gamble by the Gutsy Obama. Kind of a slap to OPEC for not increasing supplies last meeting. Of course OPEC could get ticked off, call the bluff, and cut back and wait us out. It will be an interesting summer. I predict a short term drop to 80s, then right back up again gradually to 100 in a month or so. It is 91.77 per Yahooooo Finance now.
It is a new use of the Strategic reserves. Originally for emergency supply disruptions, now being used by the Capitalist Obama to manipulate prices when supplies are adequate. Go Obama! I'm going into town to buy my new SUV tomorrow. $2.00 gas for everyone!
P.S. And I don't mind seeing the oil future traders getting killed today, hahaha gamblers, serves them right. I don't like commodity speculators with huge leverage.
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towermonkey wrote: Could it be that the administration is concerned about a double dip that is likely if oil prices continue to rise and is trying to stave that off? Wouldn't that be considered an emergency? It is more likely about the political aspects of this, but trying to play devil's advocate.
Lowering the price of fuel isn't going to stop a double dip. It might delay it 6 months or so, but the only way to avoid the coming second dip is for the folks in DC to adopt policies that encourage economic growth rather than continuing to threaten success with punitive tax increases. The capital investment dollars needed to avoid that second dip are sitting on the sidelines waiting to find out if the federal government is going to continue its current failed policies or take the tried and true tack of cutting taxes and slashing spending.
The millionaires and billionaires that the current administration wishes to punish for their success is waiting to find out whether taxes will be raised - in which case they will simply hold onto their capital, earn less so they pay less in taxes and use their current capital to supplement those decreased earnings; or whether Washington is willing to adopt a policy that allows them to keep more of the rewards associated with being willing to risk losing the capital (lower tax rates), in which case they might actually invest the money and help the economy grow instead of sitting tight until a more favorable climate exists. They already have millions or billions of dollars - they don't need to work another day in their life to continue living the good life they currently enjoy. The economy, however, does need their capital in order to grow - and they know it - and are more than willing to set pat until the brainiac's in the Oval Office and Congress figure it out as well.
HEARTLESS wrote: The economy throughout the world is hosed. Not sure if this move is too little, too late.
Little secret out there, in so many developing countries, gasoline and diesel are subsidized because people riot when the pump prices go up. So the higher the prices climb, the more money the goverment has to spend. And since it is subsidized, people tend to keep low mileage older cars.
Thomas Sowell: There are no solutions, just trade-offs.
