Fill her up!

I pulled up to my corner gas station and noticed that the price of gas had inched up ten cents more. Every day the price goes up by a few cents. It is now over three dollars a gallon. I thank God I no longer own the Toyota that only accepted premium gasoline. If I tried to cheat and mix it with lower grades, it sputtered and jerked unhappily until it stopped.

I noticed the few Prius owners giving me superior looks of "I am saving the planet, why are you driving something else?" I am picturing the huge battery in the trunk of a hybrid that is very toxic and expensive to dispose of, actually causing more damage to the environment than my conventional exhaust spewing engine. Who thinks that a Prius is a nice-looking, muscle car?

I asked the gas station owner why his prices are going up every day. He tells me that there is a tacit collusion between owners, he would get chewed if he did not charge the same price as the other owners. As far as why he thinks gas is going up, he shrugs his shoulders and goes about his morning routine.

I am thinking of OPEC and their overt collusive successful attempts of controlling oil prices and production. The 11-member Organization of Petroleum Exporting Countries has reduced production of oil times and times again in the interest of raising prices world-wide. In a sense, since they are producing 40% of the world's oil production, they have the power to control how we live and what we pay to fuel our economy.

OPEC is a cartel and economists in general view cartels as terrible forms of market organization as it is inefficient and flies in the face of consumer welfare. They control somewhat the price and certainly the flow of oil. History has shown that price controls on various commodities have caused painful shortages.

A war in 1973 between Israel and Arab nations caused OPEC to quadruple oil prices. Prices of raw materials shot through the roof while food prices increased as well in part due to poor harvests in various parts of the world. As energy became more expensive, businesses cut back, causing a reduction in productivity and thus a recession.

Things are never as simple as they seem because there are too many variables coming into play. If one adds enough variables, just about every economic theory proves to be wrong and so are the textbooks espousing them.

In 1933, President Franklin Roosevelt established that the U.S. would buy and sell gold at the constant rate of $35 per ounce. Officials at Bretton Woods conference in New Hampshire turned to the dollar as the basis for a new international economic order after World War II since the U.S. held the lion's share of the world's gold reserves.

When Richard Nixon ended in 1971 the dollar to gold convertibility, Pandora's box of ills was opened wide. The dollar had been fixed at $35 per gold ounce for a long time. Anybody knew how to convert foreign currencies on any given day into gold and into dollars. There was no fluctuation between currencies on a day by day basis. Money was always worth a certain amount of silver and gold and that never changed.

Nixon opened a huge can of worms, allowing politicians in Washington to print paper dollars out of thin air, without any backing by goods and services, thus causing inflation. And the out-of-control spending began.

Gold is a commodity in relative short supply as all the gold that was ever mined can fit into the cargo hold of a large petroleum tanker. We are not likely to find any huge reserves to be mined any time soon. Mining for gold is a very painstaking and expensive process as it takes the removal of tones of dirt and/or stone to harvest one ounce of gold. Gold prices go up and down, currently most up, in the stratosphere of $1,300 plus per ounce, but its worth as commodity money never changes. It is the value of the dollar with which gold is purchased that fluctuates wildly since the dollar is a currency deemed "worthy" by "fiat" by the American government. "Fiat" is a Latin term for "let it be." Otherwise the dollar is only worth the cotton/linen paper it is printed on and the labor and ink involved in printing it. The wild fluctuation in value has to do with the amount of currency in circulation and the faith and trust in American government and its investments.

The worth of a currency is determined by many factors such as inflation, demand for investment and goods in a specific country, interest rates in that country, just to name a few. The most interesting variable that makes a currency desirable or not desirable to have is the faith in the government of that country and the political stability of its government. We all know right now how much faith American people have in their own government, its policies, and its ability to run the country. If Americans don't trust their government, how worthy is the U.S. dollar? If public confidence sinks, the dollar devalues. This devaluation of the dollar by printing money without backing of goods and services is called inflation. And the Federal Reserve System, our central bank, is doing just that at the moment, in order to deal with the vast spending that the 111th Congress engaged in 2010. As a matter of fact, this Congress has spent more this year than all the previous 110 Congresses had.

Complicating the picture are petrodollars, or oil dollars. Petrodollars are U.S. dollars earned by a country from the sale of petroleum. The term was coined in 1973 by Ibrahim Oweiss, a professor at Georgetown University.

The Bretton Woods conference in New Hampshire established the dollar as the world's "reserve currency." This is a fly in the ointment because oil is bought all over the world using the U.S. dollar as an international currency, a global medium of exchange. OPEC keeps increasing the price of crude to guard themselves against future drops in the value of the U.S. dollar which is the international currency that oil trades in.

If the U.S. allows the free fall of the dollar by printing huge amounts to deal with its government out-of-control spending, OPEC sees its revenues plunge and has no other choice but to raise oil prices. Add to the problem the speculating on the Chicago Board of Trade of oil, currency, and gold commodities futures and you have a severe crisis.

Since gold is a reliable commodity, people are buying it in larger quantities, including oil rich Arabs who see their dollar holdings worth less, day by day, thanks to the American government's inept handling of the economy and out-of-control spending. Whether this is done on purpose to bankrupt our country, that is another issue.

After 1971, U.S. could buy crude oil for as little as $1 a barrel - now it is approaching $100 a barrel. Consumers could buy premium gas for as little as 28 cents a gallon in the early 70s. Gasoline is now approaching $4 a gallon in some states.

Are we a self-sufficient nation that could drill its way out of this problem instead of shipping our wealth and prosperity to oil rich nations who wish as harm? The seven year moratorium on drilling in the U.S. imposed recently by the Obama administration certainly dooms our ability to become self-sufficient in oil production. Many nations such as China, Russia, Cuba, Vietnam, Venezuela, Brazil, to name just a few, are furiously buying oil leases and drilling in the Gulf of Mexico, right in our own back yards, exploiting our reserves while we are forbidden by our own government to drill.

There are rich oil shales that could be exploited as well, but environmentalists lobby Congress constantly to forbid drilling and exploration in their zealous attempt to either protect the environment or some endangered species of rodent, amphibian, bird, or fish. In the process, the interest of protecting humans becomes irrelevant as humans are seen as more expendable. According to environmentalists, there are almost 7 billion of us, and we are straining the resources of the planet. White House czars advise that population must be culled drastically in order to reduce the permanent damage we cause to the environment by our mere existence.

As we watch the price of oil escalate yet again, our economy and standard of living will suffer immeasurably, since crude oil is the engine that drives the energy behind our productivity. Our way of life and survivability are inexorably threatened.

Education or Common Sense?

When I was a little girl, having a baccalaureate degree meant something. Although literate, most people were not college educated. Graduating from a professional high school that actually taught a trade was highly respected. Attending and graduating from a two-year technical school was an achievement. Few people attended college in spite of the fact that it was free. There was no shortage of people wanting to go, just a shortage of colleges, professors, and resources.

The competition to attend a university was so fierce, there were at least 10 students viying for one seat. You really had to be the creme de la creme - perfect grades, perfect scores on high school exit exams, and stellar scores on college entrance exams.

Socialism promised equality and free education for the masses, but resources were limited and thus rationing had to be instituted through very tough entrance criteria - only a select few could attend. Often, those select few were children of the ruling elite and thus automatically admitted in spite of their mediocre scores.

People were proud and content to have an eighth, tenth, or twelfth grade education. Each represented a different ability level and professional track. I say twelfth grade because many students were unable to get their high school diploma as they could not pass the baccalaureate exams.

When mom was young, under the monarchy, education was not free and most college students were children whose parents could afford, managed to borrow, or saved to pay the tuition. Most families were large and could ill afford to send so many children to college. Perhaps one of out six siblings attended college, the rest chose professions or trades with less education.

Villagers had large families - their children cared for their younger siblings and raised and harvested the crops that provided the family's survival. There was no birth control and religious beliefs forbade abortion.

Children skipped school a lot to help on the farm; their education was not up to par and many dropped out of school completely by the seventh or eighth grade. Most of my mom and dad's siblings had to complete their education as adults in night school during the communist regime.

People tend to confuse education with intelligence by assuming that anybody who is college educated must be very intelligent and those who are school drop-outs must be unintelligent. That is certainly not true.

Common sense and intelligence are also misunderstood - one can be intelligent and have no common sense or conversely, have common sense but not be particularly bright. Stereotypes and human values are assigned to all people based on their educational level, perceived intelligence, and common sense or lack thereof.

The wisest sage in my grandpa's village was the shephard who walked around half-enabriated most of the time, with a happy smile and an infectiously positive life view that astonished everybody. He never completed fifth grade and had difficulty signging his name, it was painful to watch him scrawl his name for five minutes. He had a lot of common sense and innate intelligence.

I've met my share of educated people from prestigious universities who had no common sense, a warped and shallow world view, and superficial knowledge in general. Their only claim to wisdom was the diploma that stated the potential to learn.

Green Salad in December?

I am staring at my beautiful ceramic bowl filled with a luscious chicken Cobb salad. The lettuce is crisp and fresh green, the cheese aromatic, the balsamic vinegar is divine, small strips of organic chicken, diced fresh tomatoes, bits of eggs, and the piece de resistance, real bacon.

The room is cozy and the fireplace radiates warmth from the dancing flames. There are smiling, glowing faces all around me. I let the moment sink in as I ponder where all this abundance comes from. It certainly is not from the government or my garden, but the hard work of so many people driven by their self-interest of the "evil" capitalist system. Here I am, an ordinary citizen, having a wonderful green, fresh, and colorful salad in December.

Could I have had this delicious treat that we take for granted every day in my former country, communist Romania? Not by a long shot. The ruling elite would be able to eat anything they wanted but not the "unwashed masses." We were relegated to dried beans, bones stripped of meat, or canned vegetables - if we were lucky.

Government bureaucrats told us how much we could and should buy on the market via five year plans that failed miserably to provide enough food, nutrition, and goods for the needs of the population. Central planning did not take into account demand and size of the population, it was based solely on perceived need and centralized supply, randomly and haphazardly determined by people who had no idea what they were doing, beyond the ideological rhetoric of communism.

There was never an abundance of anything. The best food was shipped to export for hard currency and the rejects were brought to the market to be divided unfairly between the large substrata of the population. Luck, barter, rationing coupons, black market prices, patience waiting in interminable lines were some of the variables determining whether you ate or not that day.

The hard currency bought industrial equipment and expertise, to develop an industry that had no chance of flourishing because factories were never run on a competitive model, they always lost money, and were bailed out by the government.

I wonder how liberals would feel if they had to do without their organic food, fresh food, or food in general? Would they change their "save the earth" tune or "capitalism is evil" tune if they were starving? Do they realize that abundance does not just happen, it is not willed or ordered by the government bureaucrats, it is the coming together of many self-interests driven by the lure of profit? We are successful because we work hard, knowing that in the end, we get to keep part of our hard-earned labor. We don't have to wait for the government to bring us what we need because, frankly, they cannot do so.

I thank farmers for growing my lettuce, tomatoes, chicken, pigs, grapes, dairy cows, and olive trees. All gave me the opportunity to buy this luscious salad today. Less than 3% of the population feeds the rest of us. It is an unsung profession but highly respectable and important to our survival. They work very hard to provide the fruits of their labor to the market with the lure of profit in mind. It is not evil, it is justly theirs for getting up very early every day during the growing season and going to bed very late at night during harvest. They are unsung heroes who give sustenance and blood to our way of life, the highly successful capitalist model.