This gentleman, Karl Denniger, has a petition and he is looking for signers. First he has a rant, and a pretty good one.
We all go grocery shopping and we all buy gasoline. This winter your heating bill is going up - way up. Democrats in Congress have repeatedly blamed “greedy oil companies” over the last several years for the increases in the price of energy.
The truth is more complicated than that. By encouraging the “Wall Street Casino” through inappropriately low interest rates commodity prices - that is, oil, wheat, soybeans, orange juice, milk and metals - have all shot up in price at an incredible pace. This is real inflation and it hits you right where you live - in your food and energy bills. Yes, your computer and blue jeans are cheaper to buy, because some sweatshop in China makes them for you - a peasant who is paid 20 cents/hour sews those jeans. But those low interest rates have destroyed the value of our dollar, and those commodities, while priced in dollars, are largely mined and produced in other nations. As a result their price rises. Gasoline didn’t go from $1 to $3 because of greedy oil companies; it rose because you were lied to by your government and led to believe that a 1% interest rate was “good for our nation”, when in fact it was only good for a few Wall Street fat cats, while your grocery bill has doubled in the last seven years. And while computers are cheaper, you can’t eat them!
You know what the truth is in this matter. Look at your grocery bill. How much has milk gone up in price over the last six months? Cheese? Eggs? Meat? Soda? These are not “exotic” things; they are items your family consumes each and every day. “Greedy oil companies” didn’t cause Milk to go sky-high in price.
Alan Greenspan, now Ben Bernanke, and The Fed did that through inappropriate monetary policy, which led to devaluation of our currency and a resulting rise in commodity prices when measured in dollars.
Of course, the price of oil does also affect the price of these commodities because oil is a major factor of production and delivery. And the oil companies have stopped investing in power, plant and equipment because what’s the point investing in a dying industry? They operate in profit-taking, declining industry mode. (I thought this was rather amusing.) But he’s talking about monetary policy. That’s bad, too. Anyway, these things are all connected. The fact is we are getting screwed nine ways till Sunday, making it easier for responsible parties to point fingers at each other and absolve themselves.
Meanwhile, The Boston Globe returned it’s front page to world series events and ran a downright bleak story on heating oil prices. There’s no candy-coating this one. People are terrified, already cutting back on food in anticipation of trying to afford to stay warm and eat. One middle class family (self-employed carpenter and schoolteacher) is on track to spend $5,700 to heat their house this winter. That’s a lot of money. The article goes into some detail explaining how strong global demand, tight supplies and the fear of something happening have all been driving crude prices upward. Local dealers can no longer forecast costs accurately and therefore, many have stopped offering season contracts at fixed rates.
Wages flat, prices of everything up, massive debt, dollar weak, federal fuel assistance cut…This country is standing at the brink of economic disaster. The next time I see some suit on tv talking happy talk about the economy and the market, I think I will just gag. This is reality for far too many people:
Ellen Sdrollas of West Roxbury lives with her 17-year-old son on a $635-a-month disability check. Even with the new state money, they will likely receive less than $500 in fuel assistance for the winter. Last year, they suffered through a month of midwinter without heat, huddling around a gas oven while they scraped together money to fill the oil tank. Now, she despairs at how long they might go without heat this winter.
“I just don’t know what to do,” said Sdrollas, 51. “We barely eat already.”
At what point do we all understand what’s going on here? The middle class is being systematically destroyed. No middle class, no America.
