NOTE: I wrote this post a couple of weeks ago, and then left it as a draft because I figured it would turn into another battle about AGW. However, the predictions I was making then seem to have born fruit, so I decided it was time to actually post it, focusing on the fact that this policy failed miserably.
Obama’s team, suddenly realizing that their belief expensive gas was awesome and a needed thing for the nation was not shared by the majority of people getting hammered by high gas prices, recently decide to open up the Strategic Reserve to try and stem the flood. Many, like me, where baffled by this move. Doing this now was way to early to affect any meaningful change to gas prices in anything but the immediate short term, and there was no way to release enough to carry that effect into the 2012 elections. More incomprehensible was the fact that they missed the point that it was almost a given this move guaranteed that they would cause an increase prices in the long term. Sooner than later they would have to replenish any oil released, and that massive demand against the same amount of resources, was only going to drive price up. This desperate and ridiculous move was sold as a big win, under the guise that the administration was broadcasting that it could do this at any time, thus hurting speculators badly, but to me it simply seemed to follow the same pattern of insanity that has been part & parcel of these people.
The left of course reported this as a brilliant move, as NPR did, while those that live in the real world and understand the basic principles of economics or what the Strategic Reserve’s function is supposed to be, pointed out this was for what it was. Some even predicted the short term drastic drop that would then quickly be followed by even bigger increases as the Jutia Group did here. And as they predicted, the prices dropped about $9 dollars a few days ago, but today started jumping up bigtime as the traders adjusted to the reality that this move wasn’t going to have much more than a brief impact on supply and was nothing more than a political ploy.
Those drops we saw in gas prices are not going to last too long it seems. That relief we just got at the pump doesn’t look like it is going to last too much longer. Hope you didbn’t change your traveling plan or budget, because high prices are soon to be back.
The above was my prediction over 2 weeks ago. It looks like I was right predicting that this stunt was going to fail miserably