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The U.S. Congress continues to show an incredible
amount of ignorance on the oil issue. This week, the U.S. Senate held a hearing on
the high price of oil and called out a group of oil company
executives to testify. In addition, the U.S. House of Representatives
approved a bill to sue OPEC over the high oil price. All of this
grandstanding by our so called elected officials is going to do nothing to
resolve the high oil price. This is a case of the U.S. Congress misdirecting
the blame of the high oil price on OPEC and the major oil companies when they
are really only minor players in this game. Threatening to sue OPEC is an
incredibly stupid move because
that could very well have the reverse effect and cause
OPEC to respond to this threat by reducing the amount of oil they decide to
pump. The two major reasons for the high oil price involve the Federal
Reserve devaluing the U.S. Dollar through their monetary policies as well as
the U.S. occupation of Iraq and Afghanistan. On top of this, it
is clear that the Bush administration is looking for any excuse possible to
bomb Iran.
Israeli Prime Minister Ehud Olmert has even stated that a naval blockade of Iran is
an option that should be put out on the table. With the
devaluation of the U.S. Dollar and a potential expansion of war in an area
where a tremendous amount of oil is drilled, it is no wonder why the oil
price has skyrocketed as high as $135 a barrel. This makes the actions of the
U.S. Congress entirely insane and intellectually bankrupt. Expect oil prices
in the long term to move much higher.
Since oil is priced in U.S. Dollar denominated terms
and the monetary unit of the U.S. Dollar continues to be devalued by the
Federal Reserve’s ability to create as many U.S. Dollars as they like,
it isn’t a real mystery as to why the oil price is so high. Instead of
suing OPEC, the U.S. House of Representatives should be suing the Federal
Reserve for fraud. The Coin Act of 1792 states that U.S. Mint
employees who are caught debasing the nation’s coinage would be subject
to the penalty of death. The Federal Reserve is engaging in the
intentional debasement of the nation’s currency which is fundamentally
no different and in fact worse than employees of the U.S. Mint debasing the
nation’s coinage. Instead of debasing the physical coinage, bankers can
simply type digits into a computer to devalue the nation’s currency. Maybe
the death penalty should be explored for some of the central bankers that
have engaged in these practices.
The U.S. Congress is also helping to contribute to
the high oil price with their ridiculous policies. They have funded the
illegal and unconstitutional occupation of Iraq
and Afghanistan
since 2003. The U.S. Senate just passed another war
funding bill which will give the executive branch another $165
Billion to continue military operations in Iraq
and Afghanistan.
By continuing the military occupation of these countries it makes an attack
on Iran
all the more likely and contributes to greater uncertainty in the oil
producing region.
General David Patreaus the
current commander in Iraq
is on the path to being confirmed as the new CENTCOM commander which means he
will be in charge of all U.S.
military operations in the Middle East. Assuming
he gets confirmed, the chances of a strike on Iran will be all the more likely.
Admiral William Fallon the former CENTCOM commander resigned from the
position due to the perception that he was refusing to play ball with the
Bush administration’s agenda on Iran.
With or without a military strike on Iran, we will
eventually see $200 oil. An invasion of Iran would only speed up the
journey towards $200 oil. The reason for this is simply because of the fact that members of Congress on both
sides of the aisle refuse to seriously address the issue of war or the issue
of the private central bank. They point fingers at OPEC and oil executives
when in fact much of the blame rests with their own policies. They let the
Federal Reserve operate in secrecy with little to no oversight and they
continue to fund the illegal occupation of Iraq
and Afghanistan.
The blame for high oil prices placed on OPEC and oil executives is just a way
for the powers that be to misdirect people from the real cause of the high oil prices.
Even though oil is moving higher in the long term,
nothing goes up in a straight line. We’ll likely see the oil price move
down a bit before moving higher. In addition, $4 for a gallon of gasoline is
going to be the norm across the United States very soon. We've
now seen predictions on CNBC of eventual $12 to $15 for a gallon of gasoline.
If the Federal Reserve is not held accountable and the illegal wars in Iraq and Afghanistan continue, these types
of gasoline prices are a definite possibility.
The gold and silver prices are also starting to move
higher with the recent explosion in the oil price. The central bankers simply
cannot suppress the gold and silver prices forever and market forces have
always taken over in the end. Gold will move back towards $1,000 an ounce and
silver will move back towards $20 an ounce. My previous article correctly
called a recent short term bottom in the price of gold and since $100
oil is here to stay, we will likely see $1,000 for an ounce of gold in the
very near future.
The bottom line is that the federal government and
the Federal Reserve is to blame for the out of
control oil prices. All of the grandstanding and threats against OPEC and oil
executives won’t change that fact. They need to go after the Federal
Reserve and make a serious move to end the wars in Iraq
and Afghanistan.
Failure to do this will ensure $200 for a barrel of oil, $2,000 for an ounce
of gold and $50 for an ounce of silver sometime in the next few years. These
are conservative estimates, and it could in fact be much worse than that.
Lee
Rogers
Editor, Funny Money Report
Lee
Rogers edits the Funny Money Report, whose object is to educate people as to the frauds of our dishonest paper money system and to
provide information on stocks in the precious metal, base metal and assorted
hard asset sectors. You can subscribe to his newsletter by clicking here.
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