LTTE Political reasons for high oil prices.

[TWiley]

FED Up Yet?

Fuel pricing has a more deliberate and insidious aspect than what has been widely reported. It is not true that oil and gold have simply become more valuable; it is also the case that the dollar has been devalued to a point where it takes more of them to buy a gallon of gas.

Think of it this way. An ounce of gold would buy a decent men’s suit in Dante’s day. The same amount of gold will buy one of equal value today. The suit only seems more expensive because there are more dollars involved.

The main culprit is the Federal Reserve Bank which has been politicized by an oil-baron president. A president is also obsessed with his “legacy”. The cost of energy has risen to record levels, and yet, our Republican administration believes that inflation is low. The Federal Reserve follows this queue and lowers the interest rates. This devalues the dollar which causes the price of gas to spike.

The European Central Bank (EBC) recently raised interest rates (Euro) due to its perception that inflation is being “imported” from America. The mere suggestion that the EBC is contemplating another interest rate hike is enough to send the value of the dollar into the basement, and the price of oil to the roof as oil and gold is priced in dollars. This is largely due to a global lack of confidence in this Republican Administration, and its perceived influence on the Federal Reserve Bank. Just how can these two major financial institutions which are representative of different governments, look at the same thing and come to such different conclusions?

Well, my first thought is that just like other branches of our government, the FED as been politicized by that rogue faction of politicians known as the Neo-Conservatives. It was the Neo-Cons who were the chief architects in the current war for petroleum wealth. Without much surprise, the bulk of the powerful Washington Neo-Cons involved in the Iraq war strategy are also oil barons.

A low interest rate which devalues the dollar (and inflates oil prices) has helped to keep the lid on their huge war deficit. The totally irresponsible somehow appear a little bit more responsible in a delusional sort of way, and a candidate who will continue their obscene war policy will be easier to elect. Conquest makes more sense to the simple minded with high energy prices, and so does drilling in eco-sensitive regions. These “initiatives” would seem inconceivable with cheap energy. The passing of this presidential gas in November will make it appear that the new administration is to blame as the old one scoots out the door “just in time”. George Bush will successfully bask in the illusion of his legacy while sticking his “lingering outcome” to everyone else.

It is the adjustable rate mortgage that has sent so many homeowners into foreclosure. The same fate awaits us all if the dollar strengthens and lowers gas prices. The interest rates will rise and the national debt will explode. At the same time, spending for roads, schools, social welfare programs, and other domestic needs will become unaffordable as our infrastructure continues to disintegrate. With elegant precision, all social responsibility will be eliminated by the anti-social conservative chorus who sings their single-page-hymn of downsizing government and cutting taxes to cash strapped voters. They really are this smart.

A few days ago, the London Telegraph reported that the Royal Bank of Scotland issued a global stock and credit crash alert. They advised their clients to be prepared for a full fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. Their analysts predict the S&P will drop to 10,500 by September. Evidently, they are willing to bet that an oil baron president will continue to pressure the Federal Reserve to keep interest rates low in spite of its disastrous effect on the rest of us. Furthermore, it is not just those “darn Europeans” who see this problem. Morgan Stanley recently issued a similar alert.

The Bush Legacy IS that important to the hawks. They need this image to sell another 8 years of their military, energy, and fiscal policy. The Neo-Cons distorted the truth to justify their war, and they are just as determined to whitewash the real impact of it. The real Bush legacy is best described as a poisoned well.