Booze, Baseball, and another "B"

Wednesday, May 17, 2006

The Fed are NOT "teh r0x0rz"....

The Dow Jones Industrial Average suffered its biggest loss in three years today, due to fears of The Federal Reserve raising interest rates (AGAIN) amid soaring gas prices. Or you could say, the DJIA is down 437 points in the week since the last interest rate hike.

If you aren't familiar with inflation, check out this conveniently-linked Wikipedia post.

As I have always said, gas prices effect the prices of everything else, and finally the oil companies greed is starting to hit everyone in the wallet. All of the major indices have looked awful lately, the NASDAQ has lost all of the gains it made this year, and the S&P ended on an over-three-month low. But of course maybe it is true that: nothing can be done about it, it's all natural market forces, and the oil companies aren't gouging us.

Right. And maybe I'm a Chinese jet pilot.

Skyrocketing gas prices are hitting the US right in the gut, nobody is doing anything about it. Like many Americans, I've cut my driving down to the bare minimum, and there isn't a lot else that I can do to further reduce my gasoline consumption. And with the summer season quickly closing in on us, we're all screwed. I'll say it now, I'm expecting $4 per gallon gas prices by September. When it happens, I'll refer to this post.

To make matters worse, Iran today rejected a European deal to avert their "crisis." Included in the deal was a light-water reactor. I find it funny that they've rejected this deal, before they even officially were offered it. I also find it funny that they reject a deal which gives them a light-water reactor, one which could not be used for military purposes. I've never thought that Iran had evil nuclear ambitions, but they kinda look like OJ right now; rejecting a deal that included a light-water reactor. The Iranian move will only act to increase oil prices, which in turn puts more money in their pockets, taking it out of ours.

Additionally, relations between the US and Russia have been getting poorer as of late, and Russian officials have said that they and the Chinese would not support UN Security Council measures against Iran. This is why I'm a Realist. Even though my education didn't enforce this ideal, it's tough to argue against it. Of course, people who think through this Russian problem are easily able to identify oil as one of the prime reasons the Russians and their allies can feel empowered. Countries such as Iran and Venezuela have been able to spend their giant influx of oil money on military hardware, and they aren't buying from the US. Chavez has even decided to launch a space program! These countries are being empowered against the US, by our dependence on their oil. We're paying these countries to be against us.

In the past, people who supported alternative energy sources were branded as hippies (and admittedly, they were), but now it really is time to decrease our dependence on oil. Not just foreign oil (the solution to that being drilling in Alaska), but oil in general. President Bush's point during his State of the Union speech about using Ethanol, is a great one. If the US could really switch to Ethanol for vehicles, we'd all be a lot better off. Ethanol can be made here in the US, using American crops for supply. Of course, there are hurdles, but it's not like we can't figure out ways to produce the stuff that use less energy. If we can put men on the Moon and guide Apollo 13 safely back to the Earth, we can be more efficient in a production process.

Of course, it's unlikely that this will happen, and much more likely that we'll all be paying $4 per gallon, with substantially higher interest rates on our: credit cards, loans, and mortgages, within a few months.

And there's no relief in sight.

Technorati tags: , , , , , , ,


Post a Comment

<< Home