The price of gasoline is and has always been manipulated in America.
Many of you are going to have a tough time believing gas prices have been tweaked in your favor since the end of World War II. I understand if you're dubious because unleaded gasoline is rocketing toward $5 a gallon, but if it weren't for shady backroom deals between the jackals in Washington and the Saudi royal family, you'd be spending $10 a gallon.
Before President Franklin D. Roosevelt passed away, he had a secret meeting with King Abdulaziz ibn Saud on Valentine's Day 1945. In February of 1945, the Allied owers had seized momentum after the Americans thwarted a Nazi counter-attack in Belgium (the infamous Battle of the Bulge). The allied armies to the east and the Red Army to the west were converging on Germany in a race to get to Berlin first. Hitler was surrounded and it was a matter of time before the war in Europe ended.
Prior to World War II, the British maintained the Suez Canal and essentially controlled the Middle East (and more importantly the oil fields). Although America was the #1 oil-producing nation in the world in the 1940s, FDR cut a secret deal with King Abdulaziz ibn Saud. In exchange for sweet business deals with American oil companies to produce and refine Saudi oil, FDR promised the Saudis protection from potential invaders (a.k.a. the Russians) in the form of a military alliance and billions of dollars in aid (which eventually flowed back to American companies to build tanks, fighter planes, and weaponry for the Saudi government).
The FDR deal with the Saudi King strengthened America's grip on the world's oil production and it further weakened an already exasperated British Empire, thereby ensuring America's prominence as the world's only superpower. Winston Churchill, the British prime minister, completed a series of meetings in Yalta with Josef Stalin and FDR. The trio made plans to carve up the post-war world. After Yalta, Churchill also scheduled a meeting with King Abdulaziz ibn Saud to discuss post-war oil production, but FDR and the Americans got there first and the British oil companies had to settle for sloppy seconds.
Even though FDR passed away a week later, the deal he struck with the Saudis was honored. The American-Saudi alliance continues to exist because every man to occupy the White House since FDR diligently worked on maintaining their relationship with the Saudi royal family. In the 1980s, the Bush family further strengthened ties with the Saudi royal family, particularly with King Fahd, the son of King Abdulaziz ibn Saud. The current relationship between Washington and Saudi Arabia is as strong as its ever been, especially with the winds of revolution sweeping across Northern Africa and in the heart of the Middle East.
I'd love to say that FDR was an oil visionary, but in reality, his stern and swift move to control the center of the oil chess board was set in motion to strengthen American post-war hegemony. FDR, his advisers, and especially the Wall Street banks he retained close ties with, could never anticipate two major events that shifted oil supremacy from the Americans to the Saudis...
1. Peak Oil striking the United States in the early 1970s.In many ways, FDR got extremely lucky. His deal was set forth to keep the British and the Russians in check, but he arranged the deal not knowing that America's oil production would decline throughout the century and that the Saudis would stumble upon the largest oil field ever recorded.
2. Discovery of the Ghawar oil field in 1948 in Saudi Arabia.
Thomas Friedman summed up our relationship with Middle East dictators over the last three decades as this (loosely paraphrasing): "Give Americans cheap oil, don't pick on the Israelis, and we'll look the other way when it comes to your connections with radical Islam and the horrible treatment of your citizens and dissidents."
Let's not forget that several of the 9/11 hijackers were either from Saudi Arabia or had attended mosques and schools in Saudi Arabia. Many Middle East scholars often point to the American relationship with the Saudi royal family as the crux of fervent radical Islam -- we're the ones who funded the dictatorship with military subsidies and made them rich with our insatiable addiction to oil and shipped billions of Petrodollars into the bank accounts of the royals, who retained all of the wealth and failed to shared any of it with the Saudi people. The current Holy War reverts to the eternal struggle of the Haves vs. the Have Nots. In the eyes of many radical religious leaders that issued the Jihad against America, the American people were complicit in facilitating the totalitarian government in Saudi Arabia which had mistreated them since birth. Although many clerics have a legit gripe about the gross misdistribution of power and wealth, their ire was misplaced onto the average American because they assume we the people retain power and actually control our politicians, which in case is nowhere close to the truth because corporations and wealthy families/individuals are the ones who really dictate policy in our country and influence American hegemony.
That's the postmodern version of FDR's original deal with the Saudis and the reason why America pays less at the pump than Europe, South America, Japan, the Asian subcontinent, and Australia.
April 2011 - Average Gas Prices Per Gallon in USD:Just a reminder to my non-metric system fellow Americans, other countries sell their gas by the liter, so you have to some quick math to determine price per gallon. All of the above prices were obtained from wikipedia.
Australia - $5.68
Belgium - $8.82
Brazil - $5.79
Canada - $4.92
China - $3.58 (2010 prices)
Denmark - $8.93
Egypt - $1.17
France - $8.63
Germany - $8.71
Hong Kong - $8.06
Iceland - $7.00
India - $4.92 (2010 prices)
Ireland - $8.14
Israel - $8.33
Italy - $8.29
Japan - $5.19
Kuwait - $0.85
New Zealand - $6.66
Norway - $9.84
Portugal - $8.52
Russia - $3.56
South Africa - $3.97
South Korea - $5.49
Spain - $7.27
Sweden - $8.71
Switzerland - $7.68
United Kingdon - $8.29
United States - $3.79
Venezuela - $0.09
Vietnam - $3.90
The FDR deal and the ongoing relationships with the Bush junta and the Saudis manipulated our prices for almost seventy years with one exception -- that little squabble during the OPEC oil embargo. I vividly remember President Carter's gas rationing as a kid growing up in the 1970s when you could only buy gas on specific days. We lived in New York City and didn't drive as much as our suburban relatives, but I'd still get up with my father at 3am and we'd drive down the hill to the get in line at the gas station,which even at that hour, wrapped around three city blocks. I could never stay awake long enough and often fell asleep, which is why my parents' car had a blanket and pillow in the back seat for the better part of the 1970s.
Americans have historically had it easy at the pump, but that's hard to stomach when it costs $50 to fill up your tank. That's how much I paid to fill up my girlfriend's car this morning. As the numbers on the pump slowly escalated, I cursed the oil companies that were shaking us down. Even though I was well aware of FDR's secret deal, I knew that the oil companies acted together to rig the current price of gas. Have you ever wondered why there's never been a "discount gas station" like Walmart? Look around your neighborhood -- the biggest gap between the cheapest and most expensive isn't much. Sure, you might save 5 or 10 cents a gallon, but compared to the deep discounts that other industries offer -- it's not much of a savings. The oil companies have a good racket going and don't want to undercut their competitors because that would reduce profits for everyone across the board.
So when prices at the pump rise and fall, I'm always suspicious that a cabal of CEOs from American oil companies finished a conference call with Dick Cheney and agreed upon a set range of prices for gasoline in the upcoming quarter.
When you hear news reports that gas prices are rising because of the unrest in the Middle East... I immediately call bullshit because the oil companies are manipulating currents events to justify a spike in prices. Oil production is the same as it was six months ago. Sure, the Europeans are shitting bricks because they are drowning in their own sovereign debt crisis and already paying higher prices for oil, which is why normally passive, non-violent countries were egging America and NATO to interfere in Libya's civil war. Without an alliance with the Saudi king to artificially keep oil prices low, Western European oil companies acquired a significant part of their product via Libya, which is why they were desperately attempting to depose Muammar Gaddafi.
In 2008, the abrupt fluctuation in American gas prices, which peaked during that summer, had suspiciously dipped prior to the Presidential election. After today's trip to the gas station, prices have reached or surpassed those previous high-water (ho hum, or high-gas) mark and it's not even Memorial Day. Historically speaking, gas prices in America are somewhat cyclical, with the summer months usually the highest of the year. So that means gas will definitely pass $5 a gallon, maybe even $6 in some areas.
The more I thought about my anger about price manipulation, I realized I had to take a step back and look at the demise of the U.S. dollar. I did a little soul searching and created a new theory about the increased price of gasoline...
The rising price is not a reflection of corporate greed, rather it's an indication of the debasement of the U.S. Dollar.The price of gas is virtually the same -- it's just that the value of the USD is not what it used to be. The USD is on the cusp of its all-time low. As a result, the increase in gas prices is simply a readjustment due to the weak dollar. Our dollar doesn't buy as much gas as it did a year ago. Combine a weak dollar with manipulated current events, and you have a potential for a disastrous summer.
With millions of Americans out of work, the lucky ones with employment will have to pay more money to drive to work. Food prices have been rising and corporations will pass along those increased fuel costs of shipping foods from farms and processing plants to your supermarket's shelves.
A weak dollar negatively affecting gas and food prices will eventually strangle what's left of the middle class in America. Not even our bonds with the Saudi royal family, which had kept our oil prices artificially low, can bail us out of this mess.