[DeTomaso] Kinda' NPC: Why does oil cost so much?

[Ron Fogle]

Mike's right, what you feel is the devaluation of our currency.  It interests me that that feeling is not uniform across the the different types of products that I buy on a day to day basis.  I feel it especially in gas and food prices.  How handy that the government excludes food and energy when they calculate the CPI!  Hey, no inflation!  The CPI is also muffled in that, for the housing component, it includes a "rental equivilency" component.  So when we had housing values going through the roof, and rental rates were stagnant in the 2000's, the CPI was not moving upward.  Rental rates are moving upward now.  Ron


Ronald M. Fogle
President
Cuyahoga Valley Management, Inc.
 



-----Original Message-----
From: MikeLDrew <MikeLDrew at aol.com>
To: charlesmccall <charlesmccall at gmail.com>; shawkins777 <shawkins777 at comcast.net>
Cc: detomaso <detomaso at realbig.com>
Sent: Fri, Jun 1, 2012 12:45 pm
Subject: Re: [DeTomaso] Kinda' NPC: Why does oil cost so much?



n a message dated 6/1/12 1 14 26, charlesmccall at gmail.com writes:

 If price at the pump in the US was only in direct relation to the cost
 of production, profits would remain stable.  They don't, which means
 that this isn't the only reason for higher gas prices...
 
Gas is NOT getting more expensive, really.   Instead, the value of the 
ollar is plunging over time, and world oil prices are set in US dollars.   When 
US government policies result in the dollar being worth half what it was X 
umber of years ago, if the 'cost' of oil doesn't change, then the result is 
 doubling of the amount of dollars it takes to get that oil at the same 
cost'.
As the Euro crumbles, and if political changes result in fiscal 
esponsiblity in the US for a change, the dollar could well strengthen and that 
ould 
ave a potential side effect of lowering the amount of dollars it takes to 
et a fixed amount of oil.
But don't hold your breath....
Mike (too bad we're not still on the gold standard...)
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