You may have noticed that the price of gasoline has started climbing again, and if you’re looking for somebody to blame, you need look no further than your government.
As of this writing, GasBuddy.com reports the national average price of gasoline is $1.94 per gallon, up from a month ago when the price was only $1.77 per gallon. The causes are threefold.
First, demand is generally down for gasoline, and as a result refineries have been producing less of it. But there’s more to this tale then simply the laws of supply and demand, and that is why the price will eventually go much, much higher.
As ALG News has previously—and urgently warned—the unprecedented expansion of the monetary base by the Fed and the explosion of federal spending by Congress to new heights would, eventually, lead to higher prices. The coming inflation storm—already in its incipience—is all but inevitable unless government puts the brakes on its loose dollar and easy credit policies. And, it might want to eliminate its extravagant spending sprees while it’s at it.
With all of these excess dollars flooding the economy chasing resources, prices will only have one place to go. And they’ve already started on that ruinous journey.
But it gets worse.
Previously, ALG News reported that it appeared the Obama Administration was doing the right thing on off-shore drilling by not delaying a 5-year leasing plan on the outer-continental shelf that the Department of Interior was undertaking. This would expedite the process of getting new off-shore oil and natural gas rigs up and running.
Now, they are delaying the plan. Ostensibly, so the American people have more time to comment. Six months of more time. Plenty long enough for the futures markets to start to rise.
According to Interior Secretary Ken Salazar, “The additional time we are providing will give states, stakeholders, and affected communities the opportunity to provide input on the future of our offshore areas…[This] will allow us to restore an orderly process to our offshore energy planning.”
In other words, Mr. Salazar—and the envirolobby—need time to stack the deck. The public comments venue will become nothing more than a push poll. And the American people won’t even know what hit them until the die is cast and the off-shore oil is once again out of bounds.
Coupled with the inflationary policies of the Fed and Congress, the Department of Interior’s inevitable decision to once again restrict America’s natural resources will guarantee scarcity for decades to come. This unfortunately matches up perfectly with the classic definition of inflation: too many dollars chasing too few goods.
With the amount of dollars increasing at the same time the Obama Administration wants to decrease America’s oil supply, the American people should expect the price of gas at the pump to once again explode.
And when that happens, you can look for last summer’s ruinous gas pump pains to look like a minor inconvenience.
Robert Romano is the Editor of ALG News Bureau.
