PeakTrader.com

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PeakTrader:

Before Peak Oil, the U.S. would exchange $10 for a barrel of Saudi oil. Now, the U.S. exchanges $100 for a barrel of Saudi oil, along with producing oil up to $100 a barrel.

So, Americans work much harder for the same barrel of oil. Moreover, given a larger proportion of Americans aren’t working, in this deep depression, those who work are working harder for less, in part, to support those who don’t work.

Government should be facilitating domestic oil production, to employ idle resources, e.g. labor and capital, including through a multiplier effect, in related industries.

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Morganovich, I was talking about crude oil, not gasoline. Oil companies care about the price of oil. There’s a difference between production and consumption.

I’ve explained in detail before how the CPI is likely overstated, rather than understated, because changes in quality improvements were too slow and too small.

And, it’s more than income to miles driven. There’s also safety, durability, pollution, etc. Of course, mileage standards add to the cost of a vehicle and Americans are driving fewer miles in this depression.

All factors should be taken into account, rather than ignored.

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You may want to see this chart:

http://www.advisorperspectives.com/dshort/charts/indicators/miles-driven.html?miles-driven-CNP16OV-adjusted-since-2000.gif

Here’s a longer-term chart:

http://www.advisorperspectives.com/dshort/charts/indicators/miles-driven.html?miles-driven-POPTHM-adjusted.gif

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It’s much easier to import a barrel of oil from Saudi Arabia, in exchange for a cheap piece of paper, than to produce it in North Dakota.

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I already have degrees in the Scientific Method of NeoClassical Economics, which is mainstream U.S. economics. A subject way beyond you.

The U.S. has been able to consume more than produce in the global economy and in the long-run, because it doesn’t fully exchange goods & services for goods & services. Foreigners receive less through changes and differences in currency exchange rates, interest rates, and inflation.

So, part of U.S. imports is free. That’s why the U.S. can sustain up to $800 billion a year trade deficits, for decades.

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Morganovich, everything in economics fits together perfectly. You’re too ignorant to see it.

And, if you see any contradictions in my statements, they’re your illusions.

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Foreigners have to sell their goods to the U.S. for dollars to buy oil, which makes the dollar stronger, than it would otherwise be, to make imports cheaper.

Also, U.S. Treasury bonds are the safest investment in the world. So, interest rates are low.

The U.S. has been a “black hole” in the global economy, attracting imports and capital, and even attracting the owners of that capital themselves.

The U.S. is the only major economy that’s strong enough to expand with huge negative net exports.

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Oil prices adjusted for inflation was $17 a barrel in 1998. Chart:

http://inflationdata.com/Inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm

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http://www.aei-ideas.org/2013/08/labor-market-fact-of-the-day-six-us-metro-areas-with-the-lowest-july-jobless-rates-are-near-shale-oil/#comments

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PeakTrader:

“…the geography of economic success.”

The U.S. had a decline in living standards in this “expansion” from more expensive oil production and smaller trade deficits, which both add to GDP and both subtract from consumption.

North Dakota is an example how Americans are working harder for less, while a larger proportion of Americans aren’t working.

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However, I agree with Dr Perry more domestic oil production, e.g. in the Gulf of Mexico, California, Alaska, etc., would create more jobs, including through a multiplier effect, to create taxpayers, instead of people collecting government benefits, while idle capital would be put to work, and oil prices would fall somewhat.

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Morganovich, you haven’t refuted anything. You’re still in dreamland.

In North Dakota workers earn higher incomes, and pay higher tax rates, including with overtime. Also, prices are high, if there aren’t outright shortages.

Of course, you never understood inflation, a general price level, or the cost of living. Some people in North Dakota gain and some lose.

For example, if someone moves to North Dakota to work, he may have to pay a ridiculous amount for rent. However, if someone owns a house in North Dakota, he may charge a ridiculous amount for rent.

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Morganovich, you do realize when someone, e.g. a retired mother, collects $2,000 rent for a $300 room, that’s income.

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To Morganovich and Ron, economics is just supply and demand. It’s so easy for them.

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http://www.aei-ideas.org/2013/08/monday-afternoon-links-10/#comments

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PeakTrader:

It would’ve been better for the U.S. to continue exchanging $10 for a barrel of Saudi oil, than $100, and produce other goods than producing domestic oil up to $100 a barrel. Unfortunately, and inevitably, Americans are now working much harder for the same barrel of oil, because of Peak Oil.

Nonetheless, given the reality of Peak Oil, I agree with Dr Perry more domestic oil production (e.g. in the Gulf of Mexico, California, Alaska, etc.) would create more jobs, including through a multiplier effect, to create taxpayers, instead of people collecting government benefits, while idle capital would be put to work, and oil prices would fall somewhat.

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