23 Jul 2015

Cheap or Expensive, Pundits Hate Gas

Oil, Shameless Self-Promotion 11 Comments

My latest at IER. Incidentally, I have a neat chart showing the Fed’s balance sheet and falling gas prices. It’s funny how the fact that commodities went down when the Fed stopped inflating, somehow proves (according to Krugman et al.) that the inflationistas were wrong…

11 Responses to “Cheap or Expensive, Pundits Hate Gas”

  1. E. Harding says:

    “In contrast, oil-exporting nations that have not benefited from their own version of a “shale boom” could be hurt, on net, from the fall in global prices.”
    -And were. E.g., Russia, Venezuela.

  2. Andrew_FL says:

    If the decline in oil prices were primarily demand driven, shouldn’t the actual quantity being sold be going down?

    Demand curve shifts, we move along the supply curve, prices and quantities will be directly correlated.

    Supply curve shifts, we move along the demand curve, prices and quantities will be inversely correlated.

    We seem to be seeing oil quantities increasing, while oil prices are falling, suggesting the supply curve has shifted, not the demand curve.

  3. David R. Henderson says:

    Same question as Andrew_FL, Bob. I think this is almost entirely supply driven. For the reason Andrew says.

  4. Jeff says:

    Andrew and David,

    I think Bob is saying it is supply driven :”A major new force in the world supply and demand balance is the surge in U.S. crude output, emanating from the revolution in shale production.”

    • Andrew_FL says:

      He’s also pointing to a change in Fed policy, which would be a demand side effect.

    • guest says:

      Again, for the record, I think shale is a false boom.

      The massive hiring spree at the beginning suggested that they didn’t have all their ducks in a row. Did they rush to hire because they borrowed money?

      Something was off.

      Then Saudi Arabia underbid the over-leveraged shale and shale got crushed.

      Keep in mind that the Left loved shale before they hated it. It was supposed to be a way to wean America off of “dirty” oil.

      I think regulations on “the dirty stuff” (as Van Jones called it) merely make it seem that shale is cost effective.

  5. Major.Freedom says:


    “The Smokey Bear Effect.”


    Preventing all small fires out of some misguided “humans are evil, all pain shall be avoided”, where naturally they should occur to maintain the overall health of the forests, has lead to an accumulation of undergrowth over the decades that now serves as fuel for the raging superfires we see today.

    This is the forest analogue to our monetary system

    • Tel says:

      That’s exactly what happened in Australia, various Green groups got into low level government regulator positions and managed to block the regular backburning activities that had been normal practice. As a consequence fuel builds up and although fires are less frequent, when they do finally happen, the consequence is catastrophic.

      The Greens simply would not accept responsibility, but common sense voices started to get heard after the 2009 fires in Victoria where a number of people died.

      The government basically hates volunteers, they also hate the idea of anyone managing their own property:


      The lack of private farmers fire trucks and utes at the grass fires shown on TV suggests to me that either the media is being controlled in what it shows or the traditional and effective rapid response with massive local forces has been prevented by CFA policies to remove local private fire trucks and utes and subvert local fast response to be replaced by slower aerial attack.

      The continuing interfering of human rights by Police and Fire agency policy of road closures adding to human distress and animal cruelty.

      The apparent lack of effectiveness of aerial firefighting validates the 10 years of research by the US Forest Service in Montana and the Chisholm 3 years research in the 1980s. That it is expensive and is ineffective is no surprise.

      The exposure of citizens on frozen roads with massive fuels on the roadsides by a very small (120 hectares or so) fire in what must have been a neglected high fuel unnatural area at Hastings.

      Leave early and live (to later die in a burning crashed car along a bush road ) but also an official crawler message on ABC News Channel that says stay near shelter? Who is confused?

      The nonsense of sending a handful of volunteers with their special wheeled luggage to “Save” another state with care to ensure TV coverage.

      The use of the serious and grim address by our leaders to manipulate the public for very many individual reasons , some even sincere.

    • Tel says:

      This basically explains what went on:


    • guest says:

      Also, it would probably be easier to survive an area of forest that’s removed from civilization with a ton of garbage around.

      Instead of making a lean-to out of plants from scratch, pile some candy wrappers to keep yourself off the wet ground, and hang some ripped plastic bags over a corroded extension cord.

  6. Z says:

    I suppose Hindu holy men do avoid most material possessions, but hating gas is a bridge too far.

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