October 01, 2006

Evil Profiteers

In the last year as gas prices jumped up I heard a lot of pundits, news media, etc, etc, talking about how part of the premium we were paying was due to evil commodity investing capitalists driving up the price in search of slimey profits.

I heard lot’s of ideas about how to reign in the price using price and market controls. They even tried it in Hawaii and it sucked even worse.

I was affected. Howie commutes 126 miles per day. It’s tough in rural areas if you don’t drive you don’t work. So I live out where home prices are cheap. I drive the best mileage cheap car I can find. 28 to 30 mpg. I drive 55. Saves all those nasty fines and better mpg.

Still it cost me pretty good. $380 more the last 12 months than the previous 12 months. Not really all that much, if you think about it, but quite noticeable. I did have to cut back some. And I’m sure it affects others. Just before the price broke a young couple had run out of fuel. I had a couple gallons so I gave it to them. First time I’d had to do that lately.

But really $380 per year is not that much, you just have to cut back a bit to keep it low. Not saying I like paying more but let me make a point here. The market worked well. My broker made money for my retirement. Paid a little more here and made a little over there. We learned to conserve. Conservation and smaller cars were all the talk and look how quickly it made a difference. Do it all in one trip became the order of the day.

My other point is that the market insured there was fuel to be had. Inventory was high the entire time. The anticipation of higher prices meant that evil investors were sure to have fuel for sale at the right price. No shortages except for limited ones after the hurricanes. These were due to delivery problems not because there was no fuel.

I’ve now been reading and hearing about just how fast gas prices have fallen. I paid $1.989 on Friday. That was a pretty good price and judging from the line that will be about as low as it goes. You idiots! Don’t go all nutty keep conserving and let’s go for $1.50. Remember every drop in price is money that does not go to Iran’s nuke program.

The media have given every reason in the world for the decline in prices. On and on with a thousand reasons. I had some links and stuff but they aren’t really needed for this argument. One story I had glorified how the markets had worked well in keeping supply and driving investment to increase supply. Even created some jobs in the oil patch. But at the end the author thought he had some good ideas on how to blunt the rise of prices the next time. Fool! Do nothing!

Ok back to the subject here. Sorry I get upset by stupid people.

The #1 reason that no one, and I mean no one, will cite for the strong fall in gas and oil prices that you will never hear anywhere is………

When the price broke the “evil” profit seeking 401k managers and retirement funds and commodities traders had to sell. They have to protect the money they made for you and theirs too. In the rush to sell probably a bunch were a bit late and made less or even lost a bit. This rush pushes prices down further and even faster. Ha! Here is your revenge. Your 401ks are higher and now you can laugh at the poor bastard who was screwing you last week getting screwed a bit.

Free markets rock. Now if my state would just set it’s gas tax in line with our neighbors and bring some money back home. Nah, governments are sometimes not very smart. Neither are consumers or investors they are subject to the market as well. The market works over time. It worked for all of us consumers and evil profit seekers alike.

Prices controls would only create shortages and make quick drops in price impossible. Thus the relief your pocketbook feels this week would never have happened. I don’t want shortages either.

The best things the politicians can do is nothing. Don’t muck it up!

The best thing we can do. Don’t screw it up and buy a 500 HP car to commute in. Save that for Sunday afternoon.

That is all. Thank you very much and Death to America.