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A Little More Goofing On Wonkette | Main | Overnight Open Thread
April 23, 2011

Obama's Own Policies Are Driving The Very Speculators He's Railing Against In Regard To Fuel Prices [CDR M]

CNN had this article today discussing the problem Obama faces with rising gas prices. Ever since Obama said last week that there was nothing he good to do in the short term, the MSM keeps on repeating it without any critical thought. I assume one would have to believe gas prices are rising because of the turmoil in the Middle East in order to fall for this. But gas prices have risen almost a $1 from a year ago and are up over 100% since Obama was inaugurated. This hasn't been a short term problem and Obama's policies are making it worse.

As the dollar gets weaker, oil goes higher. Now what's making the dollar weaker right now? Ah, QE2 is a major culprit. Since Bernanke works for the President, I think we can assume that the Prez has endorsed QE2. Ironic though. Obama rails against the fat cats on Wall Street and looky here:

New lows on market indexes tend to get people's attention. But unlike falling stock or home prices, which carry clear negative implications for the economy, a weaker dollar has some significant upsides. For one, it can make U.S. companies more competitive with the rest of the world by lowering the prices of American exports for foreign buyers. And as the greenback falls, profit earned in stronger currencies abroad translates into more dollars.

The benefits of a declining dollar showed up this week in first-quarter earnings reports from multinational companies such as IBM Corp., Intel Corp., United Technologies Corp., Johnson & Johnson and Honeywell International Inc. All reported results above expectations, thanks to robust global demand for their goods and services.

You got that peeps? Teh One is more interested in policies that boost earnings for companies than ones that would help with rising energy and food costs. Yes I get that he's trying to improve the bottom line for companies so they will in turn hire more people but it's not quite workin' out is it? But remember 52%'ers, Obama is lookin' out for you while you pay more and more for gas and food.

Downward pressure on the dollar has been one objective of the Federal Reserve's easy-credit policy, as the central bank works to boost the economy. The Fed is holding short-term interest rates near zero and is trying to hold long-term rates down via its purchases of Treasury securities.

Meanwhile, central banks in Europe, China, India, Brazil and elsewhere around the globe have been raising interest rates to combat energy and food inflation.

Gee, if the economy was truly recovering as Obama says, then wouldn't he be raising interest rates too in order to counter energy and food inflation? Short answer is he can't because the economy is NOT recovering as well as they say it does and he feels it's more important to help companies than worry about the cost of gas and food. You'd think that Obama could pick up the phone and call Bernanke and tell him to do certain things to help fight energy and food inflation, let alone strengthen the dollar. That sounds like something that could be implemented rather quickly there hey MSM?

Just think what will happen if QE3 gets implemented.

Here are two more juicy quotes of why Obama's fiscal policy is driving the rising costs.

U.S. crude oil prices, which ended the week at $112.29 a barrel, just under a 2 1/2-year high, have been driven up this year largely by the unrest sweeping the Middle East and North Africa. But because oil and other raw materials are traded in dollars, as the buck slides commodities get cheaper for investors whose own currencies are rising. It's an invitation to speculation, which in turn feeds inflation in hard assets, including energy and food.

Global investors have another dollar-related incentive to pile into commodities: If they expect that the U.S. won't rein in its record budget deficits and that Treasury borrowing will continue to mushroom, hard assets become a potential hedge against U.S. fiscal calamity that could drive interest rates sky high.

Yup. There you go. The irony of ironies. Obama's own fiscal policies are inviting speculators to speculate on food and energy as the dollar weakens and their own currencies rise. Here's your guy Holder! Obama could've influenced investors with his seriousness to combat record deficits but his 2012 budget was a flop and then his budget 2.0 speech flopped, everyone now knows that Obama is NOT serious about the deficits. Talk about adding fuel to the fire. And to think that THIS could've been something Obama did that might've influenced the market in a positive way. Instead, it was a mulligan. And we are gonna pay for it.

Do note that every time President Bush faced rising gas costs, the media and Democrats never acknowledged that there was nothing that could be done in the short term. Not once. You'd always see them calling for investigations (like Obama), or calling to release the strategic reserve (Obama talked about it back in December, but nary a peep on this since therefore it must've been a half baked idea in the first place and every time Democrats called for it in previous years.), or calling for a windfall tax on oil companies (Obama hasn't yet but I'm sure that's coming).

Let's not kid ourselves though. We all know Obama WANTS gas prices to rise. He said so back in 2008. He wants you to have to buy a new Chevy Volt. He wants us to go green and by causing a crisis, he's hoping he can push his agenda through in regard to green energy, regardless of whether or not it'll work, or save money or actually save the planet. And you can count on the MSM to carry his water. Just like it's doing now.

Cross posted at Clarion Advisory.

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posted by Open Blogger at 08:48 PM

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