13 Oct 08

$2.60 Gas  

A TFM Prediction comes true

Last week when I knew for sure prices would hit $2.60 or below prior to the election my first thought was too bad it got there in a totally different manner than how I predicted.  To clarify, I questioned the logic of my original piece because the reason cost would come down by October was because the manipulators would be hoping to boost a McCain candidacy.  Given how badly the economic crisis is hurting Sen McCain and the excuse for the lower oil price has been tied to the crises it appears the premise of my original piece must be incorrect.  

However, since my premise is the price was where it was because of manipulation then the reason it would have come down would have been as unbelievable as the reason it went up.  So I started to think about this aspect and listening to the logic.  Incredibly they were saying people were dumping commodities because of the crises.  This logic would work for if you examine oil.  In the middle of Sept oil was $100 a barrel and now $83 a barrel.  Gold (a different commodity) on the other hand was $790 mid Sept and $830 now.  

So I got to wondering.  How long would it take to manipulate oil prices down from the high of $140 to $80 a barrel?  If the plan were underway and it became obvious it wasn't going to work would it be possible to stop it?  

Another thought.  Just because someone may be manipulating the price doesn't mean that one campaign or the other is necessarily involved.  

In case you are wondering, when I wrote the first article on this subject I evaluated the likelihood of my being right to be 80%.  On this one I only evaluate this logic to be 40% good.  One of the other reasons I wrote this is because I think I captured a lot of the premises of why we are in the financial crisis in the first paragraph and I think adoption of the last paragraph makes sense.

Original - written when all the other gas headlines were saying we were going to be at $5.00 a gallon by this time.

$2.60 Gas - tfm 5/23/08

Posted by tfm on May 23, 2008 at 05:19:39:

I’m going to go out on a limb and say gas will be $2.60 a gallon starting somewhere between Oct of 08 and Feb 09. Enron wasn’t the only company in the country with employees and management who internally felt "When this election comes Bush will f------g whack this s--t, man. He won't play this price-cap b------t." and then went out and manipulated the market knowing there would be no government objection. I think the oil companies had a goal of getting oil to $80 a barrel. The price increases after that level are due mostly because of the drop in the value of the dollar and this last rush of prices is because they know the price must come down and they are hoping that when the price drops from $4.30 a gallon to $2.60 a gallon the public will be so happy with the decrease there will be no political will to prosecute them for the violations they have been engaged in these past years.

I haven’t quite figured the timing of the decrease yet. Oct makes sense if the oil companies believe Sen McCain will continue the current administrations philosophy on government over site obligations and their outlook on enforcing the law. If they see Sen McCain as their bag man they will also try and manipulate the election by lowering the price of a barrel of oil significantly temporarily causing the public to forget the economic pain Republican economic policies cause. I’m thinking that would be a bad read on the oil companies part. I’m thinking Sen McCain is as likely as Sen Obama is to expose manipulating practices and initiate prosecutions. If I’m correct and the oil companies realize this then they will continue to manipulate the market to the highest price they can extract and then allow it to go back down to their target hoping the public and the next president will be so happy with the drop they can keep it where they originally hoped it would be anyway.

Another thought – perhaps these high oil prices are being coordinated by the administration because they are really concerned about global warming. It wouldn’t surprise me if some in the administration looked at the global warming data and figured out “hey we got to do something”. But keeping with their record felt the American public was too stupid to understand decided to back handedly implement a policy designed to wean us off of gas. If this is true then gas needs to be $5 or $6 a gallon in order to make hydrogen or solar power cost effective. I personally would have preferred if the administration would have just put a $4 a gallon tax on a gallon of gasoline instead of a price manipulation that put that money in the oil companies pockets. But of course the American public can be deceived into thinking these prices aren’t manipulated. They would never go for paying a tax designed to improve the world. Even if their out of pocket expense is the same in the end (obviously it cost us much more in the deceptive mode due to lost tax revenue and because we could actually shape the development of alternate fuels).