Nationalize Oil

That's a frightening thought, eh?

Well, think about this.

China and India do that. Both have been shielding their industries and their citizens from the huge run ups in price caused by, mostly speculation not shortages.
Since we are in intense competition with these countries....been to WalMart lately?...their actions result in allowing their industries to be always lower in price.

This has a double whammy. It kills our economy, both consumer goods and manufacturing. The consumer has less money to spend so he travels less and buys fewer big ticket items. That's dollars that used to stay in the economy. And since he is stressed for cash, he will continue to go for the lowest prices, which aids China and the other SE manufacturers/countries.

Obviously there is a point where the sales volumes goes down for foreign produced goods, in a rational environment. Why? Because as our dollar weakens due to interest rate cuts, its value to the importers goes down. But, since the cost basis of the foreign manufacturers is protected by national price and supply control, the impact is not predictable. It is irrational. If our chemical companies are paying $130. for a barrel of oil, and China's is paying $40.00, they can't compete. BTW - Fertilizer is directly impacted by oil. So we are again impacted. Higher food prices hurts our consumers and hurts our farm exports. It also hurts our ethanol prices.

We are literally under attack. I can't tell you what the tipping point is, but in the last three days, at 10:07AM CDT, the market has run off about 460 points.

So we come back to nationalizing oil. Would it work? Well, price controls don't work in a free market. But nationalization would be different. As a whole we have immense bargaining power with OPEC. While our goal would be to tell OPEC we respect a fair price, of say, $80.00 a barrel, we are not going to accept gouging and are willing to take "various actions at various times" to insure our citizens' health and welfare." Let them figure out what that means.

Would it work? I don't know. But I do know that we are on the edge of a huge problem that could make 1929 look like a picnic. I also know that there is no reason why our lives should be so under control of the thugs and dictators whose only claim to anything is that they happened to be born "Kings" of oil.

The rights of Kings has been settled in the favor of democracies. Time to remind them of that.