Pravda was a beacon of journalistic truth and technical prowess compared with the Virginian Pilot
When you combine arrogance, bias and stupidity in a single package you have the editorial writers for the Virginian Pilot.
Today’s proof, boys and girls is the editorial page which has on it two editorials that are perfect examples of what I’m talking about. The first, No easy answers for high gas prices, proves that the editors are not only clueless about why prices are high but freely admit that they have no idea what to do … except offer platitudes. Let’s get to their answer first:
Today’s proof, boys and girls is the editorial page which has on it two editorials that are perfect examples of what I’m talking about. The first, No easy answers for high gas prices, proves that the editors are not only clueless about why prices are high but freely admit that they have no idea what to do … except offer platitudes. Let’s get to their answer first:
We all know the simplest and cheapest solution to high gas prices is to use less and conserve more, and work like the dickens to find something else on which to base the economy to begin a real shift to alternatives like nuclear and biofuels and solar and wind.
For the rest of the editorial they spout the Obama talking points which are too tiresome to relate, except this one which is not only wrong, but spectacularly wrong:
Even if we could extract every ounce in ANWR, it would lower oil prices by only 1 or 2 percent. The impact on gas prices would be even smaller - a few measly pennies.
Where did they get this? Well, it’s what Messiah Obama said on his campaign plane.
And it’s what Leftist hack Juan Cole has on his website.
And its’ what the Wilderness Society has on its website.
Who claims to have gotten it from a model created by the Energy Information Administration (EIA) who has created a computer model which presumes to tell the effect of drilling in ANWR 10 to 20 years from now.
Not so many years ago, we had a joke that went like this: “It must be true, it’s written on computer paper.” (If you’re too young to remember computer paper, think about it.)
But like all statistics and models this one does not pass the smell test.
Why? Well, think about this: why has the price of crude oil doubled in the last year. Yes, that’s right: the price of crude has doubled!
Has the supply dropped by 50%? Has the demand increased by 100%? How do the EIA models and the Wilderness society and Juan Cole and the numbskulls who waste out precious trees putting out the Virginian Pilot explain this amazing price rise?
They don’t.
But here’s the answer: the price of a barrel of oil is not set, in the short term, by supply and demand. It’s set by traders in the futures market. All the major producers and consumers of oil buy and sell oil based on the prices set by the futures market. Ain’t you amazed?
To make it simple, imagine that you have a million barrels of oil in your garage. You bought it a few years ago at $50 a barrel. Somebody comes along and offers you $100 a barrel, cash on the spot. Would you sell?
They don’t.
But here’s the answer: the price of a barrel of oil is not set, in the short term, by supply and demand. It’s set by traders in the futures market. All the major producers and consumers of oil buy and sell oil based on the prices set by the futures market. Ain’t you amazed?
To make it simple, imagine that you have a million barrels of oil in your garage. You bought it a few years ago at $50 a barrel. Somebody comes along and offers you $100 a barrel, cash on the spot. Would you sell?
Of course not!
Why?
Because you can get a trader in the futures market to pay you $134 per barrel - right now - (this morning’s price) if you deliver it to him in August. All you have to do is leave in in your garage for a few months. So you see, the “spot” price for oil ( the price someone who wants it right now) is determined by the “futures” price of oil (the price you can get for it for future delivery).
And that’s what the Virginian Pilot idiots never learned in journalism and creative writing classes.
So where does all this lead?
And that’s what the Virginian Pilot idiots never learned in journalism and creative writing classes.
So where does all this lead?
Well, how do you get people to reduce the price at which they will pay for oil in the future? Very simple (so simple, even a J-school grad can understand), you increase the future supply. This scares the crap out of people who are paying $134 for oil delivered in the future because someone could be undercutting them then.
Remember this, the futures market is made up of producers, consumers and speculators. It’s the speculators who have driven the price to these heights. But speculators neither need not want the actual oil; they want to make money on the change in price. Scare them by showing an increase in supply, and you will have $70 dollar a barrel of oil again before you can turn the key in you Prius.
Later I’ll be writing about the second editorial which praises Messiah Obama about his speech on black fathers. Not a word on the Pilot about his flip-flop on funding his campaign.
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