Typical Politics with old policy

We are in an election year where the Democrat is claiming that he will change everything yet what is the solution the Democrats have for the oil issue: Windfall Profits Tax.

http://www.foxnews.com/story/0,2933,364846,00.html

This is a policy that the infamous President Peanut Jimmy Carter already tried with disasterous results. At that time, gas prices were rising and the geniuses in Washington decided on Windfall Profits Tax and price caps. Guess what happened? No surprise to anyone who understands economics, companies started producing less fuel. Then what happened, fuel shortages. Carter's ingenius response? Fuel rationing. So you could only get a certain amount of fuel each week. Does this sound the future you want?

Also, how does the government getting money from oil company solve the problem that I am paying too much for gas?? This seems like faulty logic unless you are politician with a great idea as to how to spend it. They are currently saying for alternative fuels (lookup what happened to the tobacco settlement money that was supposed to be spent on education and smoking programs). Typical politicians with the same old tricks.

Now that said, the Republicans have absolutely NO idea how to work on the problem. They are just spinning in circles with really no decent ideas.

Facts are facts politicians don't understand the market. If they would stay out of it and stop trying to regulate and tax everything the solution would very quickly arise. This is how the free market works, where there is demand (read money) there will be someone to sell a solution.

Typical politicians- same tricks. The problem is that many are still falling for it.

Interesting Inflation Information

Now mind you I am not a Ron Paul fanatic or anything crazy like that but it does make me wonder how the Chairman of the Fed can watch gold, silver, oil, foreign currencies soar and then with a straight face say inflation is in check. It is because they only watch price indexes not the value of hard assets. For centuries gold was a standard because it's value didn't change. Now amazingly, it's price is skyrocketing but there is no inflation?

Here is an interesting article about the current economic situation:
Confidence Plunges, Inflation Rate Soars

I also find it kind of interesting that it never fails that the economy becomes a huge issue in every Presidential election cycle. Amazing how that cycle works.

Value of a Dollar

I am very interested by macro-economics. Not quite to the point of reading many of the books that true economists read such as Friedmann and the like (maybe with some time I might). Anyway the current currency market really interests me. I just found an interesting article on ABC News. Here it is.

Why Is the Dollar Losing Value?

One thing I do find fascinating is that many people are simple minded in their analysis of the issues with the dollar. Why is the dollar so low? Because Bush is moron. Great analysis, thank you, we are all dumber for having read that.

Very interesting dynamics at work with the dollar. Good article.

Reverse Logic for Profit

It appears that the oil markets have no sense of common logic. I was just reading an article about the OPEC decision to not raise production quotas and the following statement was made:

"Badri said there was no reason for oil to reach $100, as it almost did last week, and continued to blame refinery bottlenecks, geopolitical issues and the weak U.S. dollar for oil's ascent from below $70 a barrel in mid-August."
-- http://news.yahoo.com/s/nm/20071114/bs_nm/opec_badri_dc_1

This statement makes absolutely no sense to me. A bottleneck at the refining step is causing the price of crude oil, the product that supplies refineries, to go up. That is like saying that because the temperatures outside have been higher is the reason that natural gas prices have gone up.

From an economic perspective, it is reversed logic. It seems to me that bottlenecks in the refineries would cause there to be a larger crude oil supply because they are not processing it as quickly. This would cause supply surplus. Laws of economics say surpluses cause prices to fall not rise.

Is it possible that the all the players in the oil game have learned from politicians that if you just find something to blame people will buy it?