The Price Of Oil
What is the price of oil? What is the value represented by 1 barrel of oil? Some will say "Look up the market price" but that is way to simplistic an answer, for one because the price in dollars is a price in a fiat currency, paper with no value.The dollar price of oil?
There is a dollar price of oil. Dollars are pieces of paper issued by the FED and US banks in return for undelying assets (stuff, property). But still these pieces of paper give no claim to anything but the same pieces of paper. It seems the dollar price for oil must almost be 'circumstatial'. So what are these circumstances? How does it endow paper with thepower to price oil? What is the price ultimately?Where to begin
Before oil was around it obviously had no value to anyone. As soon as it entered the scene it became fuel for warships. Still there was no reason to give it a price, because one could simply get it where it came from and use it, no need for monetary exchanges there.Of course confiscation of oil sources, something that would have been easy for britain and the US to do did not fully take place. Oil was bought, it was primarily owned by the rulers of for instance Saudi Arabia or Iran, then ownership was transferred to others in return for money. That money was created by banks based on underlying assets. So oil was bought in return for assets. Or was it?
There is a lot to say about money independend of oil. Money is the biggest mindfuck ever perpetrated on humanity. The relationship with oil is pretty illiogic if you think about it. Money also changed its nature since oil was found. It used to be a certificate of ownership of f.i. silver. Today it is not backed by anything.
Uses of oil
A crucial question to understand the value of oil is why do people want to own it.
There are who categories of reasons:
1. To consume it unproductively
Heating, Cooling , Cooking
Unproductive mobility
Throwaway packaging
...
2. To consume it productivelyUnproductive mobility
Throwaway packaging
...
Runing machines
Making plastic and fertilizer
Working land
Distribution of goods
...
Unproductive consumptionMaking plastic and fertilizer
Working land
Distribution of goods
...
If you consume oil unproductively there really is no reason for anyone to give it to you. Why would an oil sheik or Texan hand over oil to you to 'waste' if they can get real stuff in return. Of course the oil owner could be a 'socialist', but that would throw a wrench in the whole system based around oil meant to eliminate the need for sharing : the money system. It is the money system that links unproductive consumption to productive consumption.
Productivec consumption
If you consume oil productively you are using it to create a surplus of goods (mainly), food, transportation and perhaps environments like buildings and parks. The oil is still wasted but it leaves something behind that can be consumed or enjoyed. There is no need for sharing to understand this, so the oil producer can cut a deal to deliver oil to whomever can consume it productively. There still is no need for money, why not simly account oil in gallons of oil and price everything in gallons of oil?
Runaway Depletion is Unavoidable
The funny thing with the above is the if there is an oil owner, the moment this owner is satisfied the need to sell oil stops, and the productivity would be limited. Clearly this has not happened. There are several reasons why oil sales did not reach saturation and still haven't:1. The psychology of hate
2. The nature of trade
3. Money
4. Population effects
5. Waste
Perhaps money should be nr. 1 because it is the embodiment and safeguard of competition and non-cooperation, but it is more instructive to start with hate.
Hate
Hate is unexersized agression, it is a placeholder for agression so we don't forget we have to take care of something, some day. Hate enables one not to have empathy without necessarily feeling superior (another way to lose empathy). Empathy is mostly felt with the equally vulerable. Weapons and war are expressions of hate, where even inferior countries, states, cities can desire to have their own indepenent identity, not emphasizing with any one else, like a young leader wants to develop his own judgement and not follow anybody else. If that ambition is not appreciated the young leader will hate to differentiate and protect his identity ('One day you will learn!').
Countries at the time of the discovery of oil had a lot of hate towards each other, wanted to be sovereign and wanted to get stronger. They came out of an age of personal strength, minds where not as scattered. The human temperament is probaly a lot softer today. That is why the oil countries where convinced to deliver their oil (allow exploration) f.i. by Britain. The desire to secure oneself thought oil has never declined because of the nature of hate. Hate and the thought of being in a fight means comitting to one's potential destruction, the gamble for all or nothing. There is no limit to the expenses made in such a mindset, victory needs to be guaranteed. This is why the weapons industry is so enormous and growing.
By stoking hate in the owners of oil you will increase their willingness to trade arms and deliver oil to your arms manufacturers. Stoking hate in the world in general has the same effect, because it puts pressure on the owners of oil to not be overrurn by those that want to use their oil for their protection, it greases the wheels.
Trade
Trade is where the oil man can really open up the treasure trove he is sitting on. He has the means of production, but not the skill and insight and ideas. By giving his oil to people that do he can amass whatever his heart desires. He can open up a mine and dig out all the diamonds, only paying in oil. He can feed a whole continent and get the finest wines from Australia, France etc. only by doling out oil. Stoke his trading ego and you will be his man. Give him examples fo sucessful traders, unique things to buy and he will go crazy. This mentality has been the prevailing in Suadi Arabia for instance, the ruling prince there was a playboy in the hands of the US. He didn't understand his power like his father. In trade there are hard rules, but anyone claiming ownership of oil should know he makes the rules. By introducing competition a trading mentality can lead one to gamble and give away all ones posessions because in the core trade is a game of chance.
Money
Money really is the top predator of all. It has a psychology of its own and today a Dollar, Euro, Yen or Remnimbi actually have a value of ZILCH. If one day someone discovers a way by which everone can make as much dollar bills as he/she wants all bills in circulation will become worthless overnight. How deep can a mindfuck go ? When oil was first sold this was not the case, in that time the british pound an US dollar had real value as you could exchange it for gold and silver, something that was produced from mines, limited and valued by all arabs.
If the arabs would have stuck with the gold and silver there would have been a limit to the speed of oil use, namely the speed with which gold and silver could be mined. This shows the warped nature of the oil price even in gold, as mining requires oil, so oil would once again be bought by products made through its consumption.
The general idea of money is that you control the market by controlling the contracts of exchange. People don't exchange a wide variety of certificates of ownership but one standard placeholder contract they (stupidly) agreed on. It give one a right to nothing and everything at the same time, as long as people play along. It also allows the owner freedom of choice, absence of control which is partly an illusion, but certainly an attraction. Money is not anonymous, the numbers of the bills are tracked. Fractional banking made it very easy for banks to show themselves being rich, neat, especially neat and prosperous, convincing all that money was the way towards the same (sidenot : neatness is the primay value of humanity).
To accept fiat money for oil is a surrender to the mob that controls the market. It can be done becuase all elements of oil production and consumption can be motivated by moeny, the belief in it is all pervasive. Yet the oil owner knows he only accepts his right to claim produce from the consumption of oil, he has not way to limit it.
fees, you fool!
The banks have the market by the balls, almost nothing changes hands without the use of credit based money these days, especially on the consumer side. The dominance of the banks is not set in stone, but it practically exsist as it can force the market participants to 'particitpate' (make it hard to leave the money system). It depends on myths and ignorance in the wider public, to which perpetuation serious resources are directed.
Because the money system is based on the myth of growth and competition it can not stop. Banks need pt perpetuate the myths by showing examples of winners and losers, by talking about imaginary weaknesses we have (like 'our economy'), to make us agressive, non-cooperative and want more money. The oil flow this demands is potentialy infinite. The oil owners play a marginal role as they always did. Respecting them is necesarry to perpetuate the myth of honest busines dealings (the loser kind).
Population effects
From the invention of oil based fertilizers a new phenomenon took hold that really blew the roof of the potential power or those dealing in oil (not the primary owners). Populations began to grow. Nixon can be credited with both removing the gold brake from oil expoitation and allowing industrially farmed corn to feed americans (spawning a high mortality generation). He basically unleashed the population boom based on oil, oil, and more oil. The more people the more oil consumption the better the oil companies did. Everyone was a winner.
The myth of money made it so that the oil owner had only little power, until the Opec was formed. Then it still had little power because setting a price means taking a cut of the produce, but it leaves no option not to sell. The oil owners saw that now that such a large portion of the population only existed because of oil, war was a true possibility. Now way one can stop selling to such a dependend populus. Enough SUV cherishing morons overweight from industiral corn products would wield their AK-47's bought on cheap credit from a banking system inundated with money made from owning debts of oil consumers and goods producers... The political game was simply to keep a large portion of the population believing they would 'Never sacrifice the american way of life'. Oil became like oxygen.
Fashion churns clothes at higher speeds
Waste
When you understand oil flows through society much like money does under the control of the same people you can see that in order for the money people to gain fees there needs to be production and consumption. It does not matter what the result is, the process is more important. This is a good case for waste. Wasting oil on anything, in any way is always good for the owners of the system (not you), so banks, manufacturers, traders, refineries, etc. etc. More oil, more waste, more money to eventually gain more assets.
What about the oil owner?
The oil owner is left irrelevant. One can say the the invasion of Iraq has been a mercenary job for Saudi Arabia. So that is some return value. Recently the US sold some weapons, but that is a small consolation price. Other than that oil owners have a choice: hand over the oil for a reasonable cut, or die. Maintaining the myths is the preferred way to go.So what is the price of oil
It can be clear from the above the price of oil is irrelevant. The dollar price is a fiction dictated bu the amount of cash people habitually pay for it. It has no relationship with the productivity of oil, it has no relationship with the reserves of oil. It is set by the desire of the banks that control the markets to have ample use through which they can earn and skim assets out of it. Opec has as much say over its oil as the husband that is allowed to suggest the ways in which his wife is molested by a burglar. One day oil will run out and it's price will be destroyed as the banks die. Then the oil owner will give it to whomever can keep him alive with it, perhaps even happy. Until that day the run to deplete the reserves is speeding up even as they dwindle. The myth and fundamental oil dependence of money prevents the change and cooperation needed to prevent the catastophy. The price of oil is death.
An the end game?
The worldpopulation is not dependent on oil for its food production, it can do so organically and with manual labour. However the drive to waste oil has meant that farming systems are highly dependent on oil. This means if farmers can't afford to works the land and are left on their own by the money system (that will simply register a default an move on), food production will collapse.
As the dollar is undermined through QE the delivery of oil may also be in jeopardy even though the aim may be to increase demand for dollars from foreign oil buyers by inflating the dollar. The control of the US (banks) of the oil market is key. Therefore the survival of the banks is key. The only way out that would allow a diversion of oil into development of renewables would be to eliminate the banks, make a deal with the oil owners. Another one would be to destroy the emerging markets to buy some time. If the US fails to protect its hold on oil it will see massive turmoil, a die off of epic proportions because the switch to non intensive farming takes a couple of years. A starving Alabamian family stuck where they are for lack fuel will be as insignificant to the world as children of Haiti dying of Cholera today. The commanding mode now is denial of all things to hide the decline. To use the religion of money to pretent there are reserves.
Actual food predictions
A resent analysis on food availability in 2030 says it's acceptable, but notes it depends on yeild increases and petrochemical inputs. So it assumes farming business as ususal, which is a bad assumption, as the pentagon predicts massive shortages bij 2015. It is clear oil will not be driving agriculture in 2030.
The irony is that sustainable farming has equal productivity, but uses less oil, another sign that oil consumption is egged on by a number of unnatural factors. But it does take time to get from dead chemically doused earth to healthy organic sustainably productive earth. During that transition time, which may be years, it's the western countries depending on high octane agriculture that will be most as risk of seeing mass starvation.
The cynical reality
The rich vain elite hope to see a refeshing opportunity for a cull of the 'useless eaters' formerly needed to waste oil for profit, like employees you fire. The more emphatic see potential social upheavel that will hit them as well, but feel locked down by the hard line leaders. The are unware they have selfselected themselves for non agression, that bringing the change will feel awkward and harsh.
Solutions
The solution is simple:
1. Kill the financial system
2. Ban manufacturing and markting of all non essentials including internet and tourism
3. Switch to organic non intensive farming for all who want to participate and give them ownership of the land. Bring all land into production and revive land through care.
4. Introduce a labour and/or food based moneys system. Allocate food based on distance.
5. Get renewables in place, starting with solar, wind. Prioritize critical industy instead of consumers.
6. Start the climate fight in earnest : ration, cap and close down.
p.s. Notice I've barely alluded to global warming.
F. Rincker
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