Freedomain Radio

 I was having a conversation with a friend the other day about anarcho-capitalism and government coercion and what not and started talking about how current gas prices are almost certainly a result of government intervention. Not only because if not for government involvement there would likely be any number of alternatives to cars and highways and so on but also because it is likely a result of government subsidization and other manipulation. Not suprisingly my friend asked me for evidence of this. This is what I get for arguing facts instead of morality. I realized that I did not have any compelling evidence for this stance. I looked around the web and came up with very little. My question is can someone point me in the direction a resource that I could use to research this or does somebody here have any input of thier own? I would really appreciate any help.

 Well, if you want to take it from an arguement from effect you should ask your friend why he thinks the price of oil has doubled in the past year. I dont really think there is any clear cut answer to why it has doubled. It seems to be a lot of little things that are adding up. Ultimately though, government money that is being spent on wasteful things like war is money that consumers could be spending on energy. Its not just that the price of gas is going up, its that the income of Americans is going down. This is entirely to do with the government mismanagement of the economy.

Maybe these links will help:

http://mises.org/story/3023

http://mises.org/story/3012

http://www.strike-the-root.com/82/davies/davies1.html

It seems that there are a number of things in play, a lot of which goes back to government distortion of the market (war, money and inflation, etc.)

Everyone seems to be focused on how oil prices are rocketing but I can't help wondering how much of this is in fact due to the dollar devaluing. If the US has been over printing its money supply then dramatic events like the credit crunch fiasco should make the markets sit up and reappraise the value of things. I'm not saying it's the whole story but it must have an impact ,especially since oil is traded in dollars.

Chrisgeall:

Everyone seems to be focused on how oil prices are rocketing but I can't help wondering how much of this is in fact due to the dollar devaluing. If the US has been over printing its money supply then dramatic events like the credit crunch fiasco should make the markets sit up and reappraise the value of things. I'm not saying it's the whole story but it must have an impact ,especially since oil is traded in dollars.

 

 That actually makes a lot of sense. I'm sure there is a lot more involved but that is one element that I seemingly could effect prices.

Everyone seems to be focused on how oil prices are rocketing but I can't help wondering how much of this is in fact due to the dollar devaluing. If the US has been over printing its money supply then dramatic events like the credit crunch fiasco should make the markets sit up and reappraise the value of things. I'm not saying it's the whole story but it must have an impact ,especially since oil is traded in dollars.

 

I've thought of this too, but how exactly does the US dollar effect the price of oil? I know there is some connection, but is there any detailed analysis somewhere? Can you only buy oil in US dollars or something?

As far as I know you can only trade oil in Dollars and one of the justifications for the Iraq war I came across before discovering FDR was that Iraq was going to switch to the Euro. If everyone started trading oil in Euros then all those Dollars out there would start making their way back to the US causing  massive inflation.

As far as I know you can only trade oil in Dollars and one of the justifications for the Iraq war I came across before discovering FDR was that Iraq was going to switch to the Euro. If everyone started trading oil in Euros then all those Dollars out there would start making their way back to the US causing  massive inflation.

Man that is one spicy meatball.I'd never heard that ever from anywhere but it makes so much sense if anyone ever asks why Iraq was invaded.  Not only does the government help out the ol military industrial complex by raising spending, they got to prolong the life of the oil market for a few years. 

 They really are genuises.

The Iranians started trading oil in Euro as well.

I've thought of this too, but how exactly does the US dollar effect the price of oil? I know there is some connection, but is there any detailed analysis somewhere? Can you only buy oil in US dollars or something?

i would assume that if the USD loses purchasing power then oil will cost more. is that right?

http://www.youtube.com/watch?v=LEsEvb1WsIY