Data provided by James Turk in (The coming collapse of the Dollar) and Martin Armstrong in his internet download (Its Just Time) provide the basis of my other points.

*1913 was chosen as the start year for the gold to oil chart because that was the year the Federal Reserve Bank was established (funny name because its not Federal (owned by mega bank families, Not a reserve as its just a check book that cannot bounce, and not a Bank because this form of accounting fraud requires no storage of any valuable commodity that required labor to buy.

*A large percentage of the largest corporations would not be competitive if it were not for subtle or obvious forms of government subsidy. Hence these corporations cannot be considered private enterprise and are just government entities in disguise and always have been. Without overt and stealthy forms of bailouts/privileges/preferential treatment, its not unreasonable to expect that a very large fraction of the very largest corporations would not exist, therefore they can best be described as camouflaged govt entities which require extortion (uhh taxes) in order to function.

The real battle lines have always been government and mega corporations on one side and small/medium business + the average citizen on the other side. So just remember that when somebody complains about “speculators” its likely ignorance or a government official trying to shift the blame off themselves where the blame belongs. CPI inflation is nothing more then a viciously regressive tax on those in the lower and middle income brackets.

Max:
Removing or limiting the futures market in oil would not be likely to produce lower prices. In fact, it would probably due the opposite. The role of speculators in the market is to provide liquidity, which helps the producers and users of a commodity, such as oil, hedge their future costs and revenues. One possible side effect is increased short-term volatility, but the long-term price would be higher as the difficulty in hedging would create a premium in the price of the commodity.
Prices reflect expectations about future supply and demand. This is just as true for commodities as it is for pure financial securities like stocks and bonds. While the current levels of supply and demand can be measured with a fair amount of accuracy, the expectations for the future can and do change quite drastically as new information becomes available. Thus it is also not clear that the absence of a futures market would significantly reduce price volatility.
If it makes you feel any better, there were quite a few speculators who lost money in oil last year.

No, the speculators are just as greedy as ever. But as soon as the Justice Department started investigating the runup in oil prices last year and the connection to the speculators, oil dropped like a rock! And there have been various papers issued and news reports since then confirming the high price of oil last summer had very little if anything to do with supply and demand, but with speculation.

I just hope some of the speculators choked on the high priced oil they may have been stuck with. I still maintain that anyone buying oil should have to take delivery of every drop - thus eliminating the huge up and down of prices. IF it were supply and demand determining the market price, yes, you would have ups and downs, but but not the wild ups and downs we’ve seen lately. This is because supply and demand is a much more gradual thing. It’s not like one day we have small demand and the next day we have overheated demand making for a wild flucuation. Even in developing countries you aren’t going to see this happen, and in established countries, our demand is actually quite steady, especially if you remove the wildly flucuating costs.

And now prices are lower because . . . the speculators are less greedy?

“Road capacity is a special good because the marginal cost to the consumer is zero or very close to zero, therefore there will ALWAYS be excess demand.”

The GW bridge has an $8 toll, which was just raised. People line up for 10 miles to pay it. NYC has not added road capacity for 40 years. I agree that you can’t simply add lanes on a mechanical basis, but NYC has done NOTHING to increase capacity. I have no problem with a tolled system to fund additions and manage trips, but you can’t really look at a 3 x 3 alignment of I-95 from the Bronx to New Haven and think that you are seeing an argument for “we just can’t build our way to congestion relief”. Please.

My employer does allow us to work 4, 10-hour days during the summer if we wish, which I jump on immediately! And yes, it DOES save 20% in commuting costs and YES, it does give me more family time.

But back to the speculators who cost us an arm and a leg and then went running gleefully to the bank with OUR money, I think those people should be prosecuted! And in the future, speculators should have to take delivery of every drop of oil they are buying rather than letting this be a high stakes Monoply game with you and I, the fuel consumers of this country, being the dupes! Another examply of the rich getting richer and the rest of us getting the finger!

The situation you describe does not necessarily support building more road capacity.

Road capacity is a special good because the marginal cost to the consumer is zero or very close to zero, therefore there will ALWAYS be excess demand. Heavy congestion, instead of supporting the case for building more roads, supports charging more for the use of those roads. Some system of tolls would be the most direct way to do this, but the price of fuel can act as a proxy toll if actual road use fees can not be implemented.

Large public infrastructure goods like roads are somewhat complicated by having a “public good” component - they benefit all members of society with certain indirect benefits - and thus one can make a case that they sould be subsidized to some extent. However, public transit infrastructure also has these benefits, and there is a convincing case to be made that public transit has just as much or more public benefit, with fewer negative externalities — so the question is what proportion of our resources (public resources) should we invest in subsidizing roads for automobile traffic, vs. what proporation should we invest in public transportation.

Right now, I think you would have to agree, too many people are getting a free ride on the roads, and the massive traffic delays are one symptom.

This is not a statement in support of pricing people away from cars and into an option they think is second best. It’s a statement in support of building adequate road capacity. When I see 2 hour back-ups at the GW Bridge on a Sunday night as people are trying to get home from a day out with family and friends I’m not rubbing my hands together imagining the joys of $5 or $50 gas. Clearly, creating massive, predictable congestion has not changed travel patterns because there is no way that transit will be a viable option for traveling from Plainfield to Bridgewater with a family of four and their stuff for the day — it does not work. People will sit in two hours of traffic, even people who take the train to work. Stop trying to keep people miserable (or staying at home).

That’s a strawman, of course.

A few things to keep in mind: Americans who live in congested areas are not particular happy spending as much time in their cars as they now do. There are real economic benefits to reducing congestion. There are real health and environmental (and therefore economic) benefits in moving toward a more multi-modal society. Currently, car travel constitutes something like 98% of total surface transportation and accounts for a large share of total US carbon emissions. Is it really *that* nefarious to be thinking about ways of gently moderating that (90%? 85%?) in coming decades and acknowledging the benefits of such?

Finally, given the political realities in this country around the gas tax, we’re talking here about the price of oil as set by a multi-trillion dollar international market. Whether I think a $5 gas–and the attendant effects–are “good” or not is fairly irrelevant. We should be prepared for those price levels, and if they materialize and that means a lot of lower and middle income Americans will be forced to drive less, then let’s be thinking about how to deal with that.

JR

I talked with someone in the UK. His car gets 40 MPG and he lives 10 miles away from work. So at $8/gallon his gas cost of going each way is $2. $4 round trip. Big deal. He’s considering moving to somewhere that’s 20 miles away. So his gas cost will double to a not-so-whopping $8 every day to get to and from work.

I predict that even $10/gallon gas in the USA will not be enough to kill US car culture. People will whine about the price and buy more fuel-efficient cars but little else will change.

There is really no reason to expect that equation to change any time soon.

But I also changed my driving habits at $2/gallon.

The 4 day week could also be optional, not mandatory, so people who felt it benefited them could take advantage of it, save on commuting costs, and free up highway space for other. Options are always better than prescriptions.

Parents with 8-hour days are already out of the house about 10 hours, I don’t think you’re going to get a lot of takers at 12+ hours away. Of course some people do that now, they’re called ‘unhappy’ and it’s not good for families or society.

First, I am in no way associated with this blog. I am a commenter just like you.

Second, I only pointed out that your comment was incorrect, that the assertions of the post were substantiated, and that you tried to prove your point by making unsubstantiated claims of your own. How is being factual “ungracious?”

You get offended too easily. As such, you should stay away from the internet.

-Danny

Also, in response, you propose the utterly spurious conjecture that “a four-day week might just become another sprawl enabler.” You back up this claim with a series of completely unsubstantiated “mights.” Please.

A lot of people already work 10 hour days, or commute 2 hours to work because they cannot afford housing closer to their jobs. (This claim is substantiated, by the way, by the fact that I do both) A sensible proposal like a 4 day week is a no-cost idea that might actually improve many lives, and help the planet.

I’m sure Congress is working on that as we speak…

” ’staggered’ four-day week would be an cure to urban congestion in many cities and would instantly cut commuting costs by 20 percent. It would also give Americans a lot more free time.”

Would a four-day work week really accomplish these objectives? I’m highly skeptical. First, a four-day week might just become another sprawl enabler. People on the fence about moving to the next subdivision farther out in the suburbs might convince themselves that doing so is okay if they have to drive only four days rather than five. The net result might be no decrease in total driving or congestion because people would be driving longer distances despite driving one less day a week.

The most questionable claim, though, is one of “a lot more free time.” Sure, every weekend would be a three-day one, but the other four days a week, people would be burdened with long 10-hour days. Such long work days would leave virtually no time for evening leisure or family activities and make child care arrangements unreasonably difficulty for many parents.

Ultimately, four-day weeks are another quick fix for employers that don’t want to make deeper and more beneficial changes in terms of placing their facilities near transit, providing employess with free or subsidized transit passes, charging employees for parking, and other changes that would more meaningfully alter behavior.

Now all we need is a floating gas tax that pegs gas at $5/gal and we’ll be all set!

No — 4 ten hour days vs 5 8 hr days. Total pay remains the same.

JR

Telecommuting is a more desirable outcome - IBM has about 40% of its global workforce working outside their office environment.