Interesting statistics to ponder:

Daily oil production in barrels of oil, where k = 000

In 1965, the U.S. was producing 9014k

In 1965, the World was producing 31206k

The U.S. was producing 28% of the world's oil and consuming 36%

In 1972, the U.S. was producing 11185k (historical high)

In 1972, the World was producing 53668k

The U.S. was producing 20% of the world's oil

In 1970, the Nixon administration formed the EPA

In 1971, we came off the Gold standard.

In 1973, Nixon introduced price controls on oil/gas due to

the oil embargo, which lasted 9 months. Price controls lasted until

1981 after Reagan dismantled them.

In 2007, the U.S. was producing 6879k

In 2007, the World was producing 81533k

The U.S. was producing 8% of the world's oil and consuming 24%

The Vietnam War was 1959 to 1975

We invaded Afghanistan in 2001 and Iraq in 2003.

World oil production has kept up with demand. That is why you can still buy it, maybe not at the price you want, but it is available. The high price the U.S. pays is due to the lower value of what we exchange it for, namely American dollars. The true cost of gas has declined due to better extraction methods of oil and more efficient refining.

Refining capacities have changed also.

In 1965, the U.S. was refining 30% of the World's oil; 10390k of 34514k (while consuming 36%)

Today the U.S. is refining 20% of the World's oil; 17588k of 87193k. (while consuming 24%)

The price controls of the 1970's was a total failure, as most political solutions for economic ones are.

We have had this type of inflation with every war this Nation has been in. All the politicians in Congress and the Presidents understand this, but you will find few if any to admit it. They can't put forth this type of honesty since if the American public starts to understand it they might lose their bottomless pit of money.

In brief form this is how it works.

The President goes to Congress and asks for, say 4 trillion dollars. The Congress agrees to 3.45 trillion dollars. This request goes to the Treasury Dept., which passes it on to the Federal Reserve. The Federal Reserve says ‘sure why not as long as you pay interest on it, since it really is a loan.' The Treasury prints the money and the President gets his funding and then gives us all a tax break; like that made any sense.

Remember that this is done in the present when dollars have a value of say x. When these new funds enter the market place no one knows that they are new money. (Freshly printed.) So everyone assumes they have the same value as all the other money circulating, namely x. However once the new money is into circulation it's value changes to x- since you have more dollars chasing the same amount of goods. Governments love this type of arrangements since they can purchase goods at tomorrow's dollar value at today's dollar prices and the people eventually pick up the tab. It's called INFLATION.

The HUGE increase in Oil prices is not due to just a supply/demand formula, but rather the American dollar isn't worth what it once was and continues to fall as irresponsible politicians spend and create it at will. Some of the increase will always be due to increasing demand, which is a signal for more supply. That supply has kept up with demand on a WORLD market. Unfortunately the U.S. is no longer a major player in the supply side.

In 1913 the Federal Reserve was created, then followed by WWI. The value of the dollar declined 52%

From the beginning of WWII till the end of the Korean war it declined 50%

During the Vietnam War it fell 70% and has continued the decline through all Administration/Congress sessions.

Note that from the year 2000 it has declined another 50%. There is little evidence that this trend is changing. As an economist friend of mine once told me, ‘you can always add more zero's.'

In 1900, gold was $20 an ounce. Recently it went over a $1000 a 500% increase.

According to the IMF (International Monetary Fund) the price of Gold and the price of Oil has tracked almost exactly since 2002 and a silver quarter will buy a gallon of gas as it did in 1947. In 2004 the U.S. printed 500 billion dollars.

So why is the price of gas so high? It isn't, the price of money is so low. In current dollar value the price of a gallon of gas is almost the same as in 1980-1981, 10 years after the so-called oil embargo.

Supply and demand (unit of demand) definitely have an influence on what you pay for a product, like money. A product that governments excel at producing. It's unfortunate that we can't produce wheat, corn, silver, gold, oil or any commodity as easily.

In favor of the war in Iraq? Like all those Government programs? Then don't cry about $4.00 for a gallon of gas. You are going to pay for it one way or another. In the U. S. you can control the banks and investment houses to a certain extent, one being artificial low interest rates, but you can't control the rest of the world. The value of the U.S. dollar is simply what it will buy and on the World markets, that ain't much. The President and Congress will never pass the bill directly to you, by raising your taxes, but do it in a way that hides your paying for it, with a gigantic credit card. A credit card that works in the USA, but one that is being increasingly refused abroad. A basic economic fact, which politicians continually ignore especially at election time is TANSTAAFL.

There ain't no such thing as a free lunch. (somebody always pays)

stats. taken from BP statistical reviews of world energy