Wednesday, May 25, 2011

The Price of Oil in Gold

The scramble is on for politicians (and idiotic college students) to once again find a boogeyman to blame for high gas prices. And instead of "evil big oil" or "George Bush," it seems the socialists in the country have chosen this time around (drum roll please);

"Greedy speculators!"

So in addition to;

"The rich use loopholes"
"Republicans just want to give tax cuts to the rich."
"If we just cut subsidies to big oil we'd balance the budget."
"It's corporations keeping us down."
"The rich don't pay their fair share."

you can now add;

"It's because of greedy speculators"

to the list of inane and utterly false premises faux intellectual leftists use when talking politics at parties or social events to make themselves sound educated.


Of course the reason you come here and tell your friends to come here is because you have this thing called "intellectual honesty." You want to know the truth, you care about the truth, because ultimately you know that if society makes decisions based on falsities and lies, it will ultimately collapse. Ergo, you know the Ole Captain is always going to give you the truth. And not just the truth, where like most politicians I say "you'll just have to trust me." No, I spell it out for you in wonderful, empirical charty goodness.


So today's economic lesson of the day is "How Much Would Oil Cost If We Used Gold as Our Currency Instead of the Dollar." Well shucks howdy, here it is all chartified for you by the Captain;



You see, the price of oil REALLY hasn't gone up that much. Matter of fact, the "real" price of gas has gone down. It's more that the value of the dollar has dropped so precipitously that it takes 3 times as many of them to buy the same gallon of gas it did several years ago giving people the impression gas is getting more expensive. But if you were using gold as a currency (they used to do that you know), today's price of a gallon of gas would be $1.36 equivalent.


Now I would go on about how the dollar collapsed and how trillion dollar deficits caused it, as well as social security and medicare undermining it caused it, and how this is more or less the left's fault, but I'm not going to waste my time. People on the right already know the economics behind this. People on the left willfully choose to ignore it and blame it on "those darn evil greedy speculators again!"


Instead, I'm going to go install Active Directory on a computer and make myself a Window's 2003 DNS server. Because those skills cannot be undermined by a collapsing dollar.


Enjoy the decline!

14 comments:

  1. Anonymous5:46 PM

    Another interesting set of charts are the US stock market indexes, in real gold dollars. This is where you can identify real increases and declines in the market.
    I wonder what percentage of the population would understand the price of gas in real dollars? The game of nominal dollars is played so well in Washington. And of course the media plays right along with the charade.
    Well that hockey stick graph of money supply growth, is coming home to roast. I think we can all expect a lot more nasty dollar price increases.
    Enjoy the decline, you hit the nail on the head, with that expression.

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  2. sth_txs6:09 PM

    So Captain, are you on board with the idea of individuals choosing what they would like to use as money?

    I listen carefully go guys like Marc Faber and Jim Rogers and Ron Paul.

    I'm not for a government enforced 'gold standard'; I think that we the people should be able to choose how we will trade with eachother.

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  3. DNS on Windows? Ewwww, that's disgusting!

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  4. Assume, I'm just a rookie noob in this IT thing, but that's the DNS Windows punchline being gross????

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  5. @Cap, a lot of professional servers run Unix/Linux. There are some Windows servers out there, but most of the ones I hear about are for running Exchange.

    @sth_txs, part of having a standard basis for currency is that the value used in trading is uniform for all trades. It goes a long way to keeping life simple for everyone.

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  6. Anonymous7:40 PM

    As a counter point in my side of the IT world ( designing and installing a Financial Analysis solution)

    _Every_ single server I deal with is MS Server

    The DNs servers may be unix/linux but that's invisible and un-interesting to me. :-)

    YMMV, void where prohibited, and etc...

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  7. Ah, I'm slowly catching onto the Linux/Windows humor. So far any Linux OS i've used is fine via a GUI, it's learning the insane syntax and structure of all the CLI commands.

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  8. Anonymous5:53 AM

    Greedy speculators are behind our ruin! Government officials speculate that in the future their returns on taxation will increase, and so borrow and print money in the expectation that some future taxation profit will make all excess possible! That speculation and it's greedy.

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  9. Eric (not the same as above)8:42 AM

    When the Federal Reserve turns on the printing press like they have in the last few years to bail out the banks and fund our massive deficit spending, the huge amount of inflation we are now seeing should be no surprise.

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  10. Anonymous12:36 PM

    Start, run cmd, dcpromo. Tip: NEVER name your AD the same as the FQDN of your business (name the AD cappy.local rather than cappy.com) Causes big problems if you do.

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  11. The left hates speculators, so what do they want: a cap-and-trade market that will let people speculate on energy.

    I'm sure carbon derivatives will be as awesome as mortgage derivatives.

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  12. Hey Captain. Not to be a Conspiracy nut or anything, but is there something that Obama REALLY needs to hide from Americans before the elections?

    Osama being dead and all.

    Is something big happening with the world's largest economy?

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  13. Carlito12:49 PM

    But captain... shouldn't that very same chart be constructed with a CPI index? I'm not an economist but I thought that CPI should reflect the losing purchase power of the dolar.

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  14. Eric (not the same as above)7:58 PM

    Carlito,

    The CPI is an indicator of only a portion of inflation. It excludes energy and food prices, which are a very large portion of a typical person's budget.

    Of course money is just a way to trade goods and services. As we make more goods and services more efficiently, if money was stable, prices should drop. Instead, the Federal Reserve prints money and gives it to banks and the government. Now with more money chasing these goods, prices go up instead. It is an insidious hidden tax.

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