Political Gas —— Muck’s Half Minute

Oh my! Good times are coming round the corner again! The underclass can actually afford to gas up the old junker and drive downtown to the grease parlor and get a Big Mac.. Or maybe put the Mac in a picnic basket and go visit Aunt Bea in the next county!

Trucking companies can shave a few cents a mile off their OTR rates (grudgingly!) and – if it continues – the poor consumer may even benefit a little bit at the bottom of the food chain.

Have we found more gasoline? Hmmmm! Maybe for a little bit in Alberta and plus a few other tar sand and shale oil locations like North Dakota and Pennsylvania and a few lesser finds. These oil fields sandwiched between layers of rock are very expensive in terms of lower ROI (return on investment) and are not sustainable in any sort of even medium term. To maintain flow you have to keep drilling more and more wells because their half life can be measured in months rather than years. The Bakken formation for example, half life of a producing well is 24 months and exhaustion after 5 years max. Costs go way up as time passes because much more fracking is required in the later half of a shale oil wells’ life.

We are assured that pretty quick now we will become the biggest oil exporter in the world, making Saudi and Russia look like small time operations sucking up leavings at the borders of the huge US Oil Pond…

Believe me, it is not going to happen that way. A shale oil well has a half life of a gnat geologically speaking and very rapidly on a human time scale – not geologically, the ROI (return on investment) of obtaining oil from shale or tar sands at a profit will implode for lack of investment capital which dies from the ROI going through the floor and misallocated investment bubbles (like shale oil!). The current glut of oil and jaw breaking drop in world crude prices will only hurry the bubble into the “pop” phase. In fact I could swear I hear a “pop” already.

The destruction by the Federal Reserve and Wall Street of all real pricing mechanisms insures that the capital markets will disconnect ever faster from reality, thus making it totally impossible to calculate ROI on anything and as a result the rapid multiplication of totally bogus and inappropriate investments will continue – until it stops!

However, back to todays’ subject.

Gasoline prices are very important to consumers (voters). When prices go down, expenditures on toys go up. Never mind the .2% increase in jobs or the .4% decrease in those seeking jobs (hence not unemployed) those percentage quivering figures reflect quaking finger strokes of zombies (slightly defined as “employed) at the Bureau of Lies and Scams or perhaps the massive rumor mill called the Census Bureau which daily, weekly or monthly receive memos from various underlings passing time in the Executive Branch instructing these bureaus exactly what numbers to plug in where in these totally false and useless reports.

Remember, anytime one of the Bureaus that grow, leech like, under the paving stones of Washington and issues a “.2%” this or a “.4%” that, those figures are far exceeded by the error window of the results that can be expected after so called statistical analysis of the biased or totally false data. They are totally bogus and not worthy of even considering.

So we have the wonderful situation (and have had for 50 years) where decisions are make (usually wrong), policies formed (without accurate intelligence), military action taken, thousands of lives lost, countries bankrupt, wars fought, all based on bullshit. (Terrorism is the exception and we can’t even do that right.)

In the short term, however, just like printing money, issuing unbacked sub-prime paper, floating bogus bonds that will never repaid, making direct central bank (or their proxies) purchases of bad bank debt to direct (leveraged) purchased stock market securities and other Ponzi Schemes it seems to both the observant and ignorant (and the two are, by no means exclusive!) to be working well. Of course, the entire middle class might have a few bones to pick with that evaluation as the whole shebang will eat our lunch one day real soon now and there will be nowhere to hide. The middle class (as it used to be defined) is already choosing whether to pay the rent, eat or pay for medical services (especially drugs – but that’s a whole different racket).

But back to our main subject. Gas prices. I’ve noticed that a particular ordure saturating the air whenever I fill up my family chariot. I drive a Prius, so I fill up about once a month whether it needs it or not. But the ordure that issues from fume leakage from the fill cap area has a distinct characteristic about it. The gas ordure smells exactly the same as the fragrance you notice whenever you are in close association with a politician!

How does this happen, you ask?

Dear reader, the 4th of November rapidly passed and since every lying, crooked politician in the country has attempted to take credit for lower oil and gas prices in order to convince stupid voters to vote for those same equally stupid politicians in 2016.

Either of two results may come to be. On November 5, 2014, all stops will be removed monetarily and fiscally and every effort will be made to extend the lower prices through the 2016 elections. That result is less likely because it so far away and so many things can go wrong for a “fix” like that to succeed.
The gas price before the general elections in November, 2016, will be interesting to watch though..

I hesitate to even try and guess because the totally out of control U.S. national un-repayable debt situation may, between now and then, overpower every other troubling worm hole and rotten structure in our nation’s future.

Who’s worse off? Japan is temporarily better off because they import every ounce of resources they use, have a national debt of 250% of GDP, an ever growing old age colony and ever shrinking work force (they to not tolerate immigration at all) which, in all, puts them first in line to regress to Medieval times before any other industrialized nation.

Ah, the complexity of it all. Bear in mind that this may all happen (When? Who knows) or it may not, depending on so many thousands of variables that any attempt to forecast the future beyond tomorrow is like looking through a broken and smokey crystal ball!

All we can do is try to catch the shorter-run consequences of stupidity and use that tentative short term information to protect ourselves – as those lower gas prices yell in your ear, “Hey – let’s go buy a Hummer!’ which may not be the wisest conclusion to reach.

Author: MuckAbout

Retired Engineer and Scientist (electronic, optics, mechanical) lives in a pleasant retirement community in Central Florida. He is interested in almost everything and comments on most of it. A pragmatic libertarian at heart he welcomes comments on all that he writes. View all posts by MuckAbout