All sarcasm aside, I have to enter the real world soon. Oh well, at least my mom got me an ipad as a graduation gift!
Now for some actual news, two reports today that are leading me to believe that high gas prices are here to stay.
First is a report from Libya:
TRIPOLI (Reuters) - Libyan government forces bombed large fuel storage tanks in the contested western city of Misrata, destroying the tanks and sparking a huge fire, rebels said on Saturday.Here is a video of the burnings:
The bombardment came as artillery rounds fired by forces loyal to Libya's Muammar Gaddafi fell in Tunisia in an escalation of fighting near the border between Libyan soldiers and anti-Gaddafi rebels.
Misrata is the last remaining city in the west under rebel control. The port city has been under siege for more than two months and has witnessed some of the war's fiercest fighting between loyalists and rebels.
Expect ground troops soon, well more than we have already seen at least. And now here is this report from Iraq:
IRAQ is preparing to halve its official oil production target, forcing companies including BP and Shell to renegotiate their contracts. The country's Oil Ministry, with backing from the Prime Minister Nouri al-Maliki, will set a new target to produce between 6.5 million and 7 million barrels per day by 2017, down from original plans to pump 12 million barrels, according to industry insiders.
Iraq, which is a member of the OPEC cartel that pumps 40 per cent of the world's oil, produces about 2.68 million barrels a day, barely higher than under Saddam Hussein.
Baghdad believes it would not be in its interests to try to achieve the 12 million target by 2017 because boosting global supply would depress prices.Good thing the average price of gas just hit $4.00 in the U.S. Robert Reich is out with a column today in the San Francisco Gate today further proving his overall ignorance when it comes to economic matters. Excerpt #1 on trying to disregard the harmful effects of inflation:
First are price upswings in food and energy. The (Wall) Street doesn't seem to understand that when most peoples' wages are flat or dropping, additional dollars they spend on groceries and at the gas pump mean fewer dollars they have left to spend in the rest of the economy. Rather than causing inflation, this is likely to lead to more job losses.So even if Bernanke has the printing press running on high, inflation still won't occur if people are unemployed? Yes, wages rise with mass inflation, but I suspect we may see that trend very soon. I was standing next to a girl for graduation yesterday who said she worked at Sheetz for three years and was making $11.75 an hour. That seems like an awfully high wage for college student working at a gas station. Hell, when I was a college student working at an amusement park, I was promoted three times, a supervisor for employees and other managers, worked incredibly long hours (sometimes 16 hours a day) and still only made $9.25 toward the end of my time there. And that was only 2 years ago. Here is excerpt #2 from Reich:
The Street also is worried that the Fed's easy-money policies are pushing the dollar down and thereby fueling inflation, as everything we buy abroad becomes more expensive. But if wages are stuck in the mud and everything we buy abroad costs more, Americans have even fewer dollars to spend. This also spells recession, not inflation.Reich clearly does not understand how inflation actually works and that it enters the economy in stages rather than all at once. He bitches about how the middle and low class aren't seeing the wonderful effects of inflation but then complains that Wall Street is seeing huge profits:
The biggest irony is that the Street is doing wonderfully well right now, in contrast to most Americans.He hates seeing the big banks making huge profits, yet doesn't realize that is precisely how the Fed's newly printed (digital now) wealth enters the economy. Reich not only fails at understanding economic theory, but he butchers Keynesianism by overly simplifying it.
I will end with a quote of the day from the almighty Jim Rogers:
The Fed has always been aware of election cycles and tries to make the economy good ever since the 1980s; I don’t say that with admiration, I say that with scorn. - in CNBCSo much for political independence.