I question the premise that the President should do anything about oil or gas prices. I believe the President and our government should act in a manner that is consistent with free and fair market principles and let prices respond to market forces.
Currently the rise in oil prices has very little to do with the natural forces of supply and demand. Some can easily argue that there is an increased risk premium in the price of oil due to unrest in the ME - I doubt that risk premium has increased $50 - $60 dollars in the past 12 months.
I do believe that there has been a trend over the past few years of abnormal commodity inflation (oil, metals, crops) due to economic policies, i.e quantitative easing and national debt. If we address these issues we would see a drop in commodity prices.
The quantitative easing, aka -QE1 and QE2, being done by the Fed in my view the wrong approach to trying to stimulate the economy. and unfortunately the way in which inflation is measured, no one is seeing the statistical impact on inflation. However, people are beginning to feel the pain every day at the pump and at the grocery store - and it is going to get worse. I suggest people become more aware of what the Fed is doing and encourage it to stop.
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Quantitative easing (QE) is an unconventional monetary policy used by some central banks to stimulate their economy when conventional monetary policy has become ineffective. The central bank buys government bonds and other financial assets, with new money that the bank creates electronically[1], in order to increase money supply and the excess reserves of the banking system. This action also raises the prices of the financial assets bought, which lowers their yield (as long as the yield is above zero).[2] Quantitative easing shifts monetary policy instruments away from interest rates, towards targetting the quantity of money. However the goals of monetary policy (including inflation targets) remain unchanged.[3]
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Quantitative easing - Wikipedia, the free encyclopedia
Ron Paul often uses the term fiat money and is the only person seriously talking about the issue.
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Fiat money is money that has value only because of government regulation or law. The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used.
Fiat money originated in 11th century China[1], and its use became widespread during the Yuan and Ming dynasties.[2] Today, all national currencies are fiat currencies[citation needed], including the US dollar, the euro, and all other reserve currencies. This trend began with the Nixon Shock of 1971, which ended the backing by precious metal of the U.S. dollar.
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Fiat money - Wikipedia, the free encyclopedia
I don't suggest going back on a gold standard, but our government has to have some kind of standard, even if it is as simple as a debt limit or restricting the size of government to a certain percent of GDP. The last thing we want is hyper-inflation.