Demand Destruction Vs. Washington’s Lip Service

The Affects & Dire Consequences of A Useless Counterproductive Windfall’s Profits Tax

vs.

Plain Simple Demand Destruction

or …

Giving Washington Emotional & Irrational Demands

vs.

Taking Reasonable Individual Responsibility

 

Choice seems to favor liberty. I know, I have visited and lived in communistic and former communist sattelite countries.

However, America has not and is not truly taking advantage of its diverse energy resources.

And in this regard, choice is being deliberately restricted.

These restrictions affect  choice, as well as how  the limits of restricted or limited choice  affeccts  price and shapes the impact of supply and demand.

Likewise, in spite of the fact that America has long known that it has an energy problem; America has failed to become busy in a meaningful manner which agreesively promotes a build-out of a wider energy infrustructure.

Evidently, America’s policy makers do not share industries desire to actually ernestly   desire to achieve energy independence.

In view of this failure to redeem the time; Washington seems to me …more willing to invite any policy detrimental or otherwise …which is cabalbe of weaking the dollar and thus fan the flames of inflation …still further than whatever means the Federal Reserve Chairman, Ben Bernanke has at his disposal …in his near empty arsenal.

Such poor policy choices as it is make for a lack of choice though. And, in my humble opinion …threatens Homeland Security in a way which most people are being taken unawares.

As such, America’s (comprehensive???) energy policy (…or, lack thereof …) reflect a sad lack of consideraton for Lady Liberty which is consistent with Washington’s lack of esteem for what should, otherwise be delivering …service by Her duely elected public servants.

Sadly, in the absence of an adequate abundance …let alone …a bare minimum of any due measure of what responsible considerations should otherwise be offering America Her the badly needed due diligent of responsible service; Wahsinton’s lack of esteem in its lax regard …is failing to promote a healthy energy independence …and have pretty much dropped the ball. “Yes (…Barack …) you have …!”

And in this regard, America is being held captive by Washington’s darling exclusive and extremely large and influential well greased oil lobby.

 Poor Old Uncle Nat Gas! You just haven’t had a chance outside the House of Representatives. I would speculate that, given the Democratic majority of the Senate; that’s where I would concentrate my lobby’s efforts too. It just makes good sense …dollars & cents.

Poor Old Bio-Fuels.

Without greater choices, such lobby’s efforts and motives set up road blocks and sidetracks …making nothing more than intended conflicts of interest …those conflicts which do no service to America, those which make for fewer choices and stand in direct conflict with the interests of Homeland security.

The resultant pursuit of poor excuses do …however have significant dire consequenses which we …as a nation are now, being made to live through …time after time …time after time; same as it ever was …same as it ever was.

No actions equal no additional choices.

Such has produced nothing new …other than the same old knee-jerk approach to crisis with standard emotionally charged knee-jerk blame and shame measures which play out like a bunch of chickens jumping aimlessly around with their heads cut off.

The lethargies slack which have done nothing and netted still less are unable to prevent these crisis from rearing their hear time after time …in much the same way as it ever was …same as it ever was …same as it ever was …in socially irresponsibility.

Is crisis the only reality on Capitol Hill …one whose political reality is paradoxically alive and well thanks to all the aurger of every ensuing in a rear view forward-looking planned crisis?

Never mind! Pay no attention to the man be hind the curtain.

Where is it all to end?

I would simply say; in the elasticity of supply and demand.

More specifically, I would say; that, in attacking demand …the efficient answer lies in a unified …comprehensive …deliberate …orchestrated effort which results in what is called “…conservative demand destruction.”

This is a Macro approach which must include an emphasis upon Micro management.

Just like pushing away from the table, losing weight is an individual choice made gradually …one bite and one meal at a time.

In this case, it will needs must be …one fill-up and one mile …in every trip …every day …and every week.

Baby learned to crawl before Baby walked.

And baby; America needs to run toward energy independence this moment …more than ever on an individual by individual comitment to consciously destroy demand.

Therefore, please …above all, take time to strongly consider the following reports and resources …cafefully.

Regulators Seek to Throw Light on Hedge Fund Impact in Energy Trading

by Darrell Delamaide

http://www.florin.com/valore/guests/oilprice7.html

When a stock which short sellers have been counting on falling …rises instead, these speculators have no other choice but to cover their shorts.

This is an action which has the net affect of propelling the underlying shorted equity higher …rising even higher …and faster. As shorts are covered in mass, simultaneous, widespread “covering” actions prevail …producing price spikes which confirms the reality that the underlying equity position’s price had been under the influence of many short sellers.

This can be a short-term or a longer-lived phenomenon which illustrates the affects and the impact of the elasticity of supply and demand on price …as evidenced in results which produce sudden upside price spikes …especially at the moment of discovery …I.E.; the release of new and controversial news and or events and surprises.

For example, if, for any reason …news gives good reason that there is a sure and credible cause which will likely lead to an increase or rise in the earnings or price of the underlying equity …speculators who have been betting on a fall must react quickly …or, face swift and sour disappointments in the wake of the rapid evaporation of the value of their capital positions and or their respective option’s contracts.

Options traders, in this scenario have no other option …or choice but to cover their shorts …in unwinding their trades in atmospheres where the supply of the underlying shares of the equity’s position is in short supply in the face of strong and rising demand.  

Demand Destruction

Now, ask the question; how might this scenario look if, long trade investors and short buyers (not short sellers) have been betting by taking up long positions?

That is; what does an investor do when their stock tumbles? The sell out of their positions …and the more sellers sell …the more likely it is that price will fall …especially in the face of …and in the absence of buyers.

More sellers than buyer is an atmosphere in which price falls.

This is the simplicity and essence of Demand Destruction.

Enter one additional aspect of this scenario called …DEMAND DESTRUCTION, and …ONCE IN THE ROOM …you have the potential …for the inverse scenario of producing short covering, namely …an action taken by traders, investors and speculators …one in which all are left with no other choice but to scramble toward the exit door …in a rushed order to uncover and sell out of their long options positions.

Remember; many sellers and fewer buyers = falling prices. Hence DEMAND DESTRUCTION.

In this manner of conservation; who needs Washington to intervene?

Just like good news causes speculators to cover their shorts …

Demand Destruction …causes speculators to unwind and come out of their long positions. Speculators limit their losses and take their bets off the table.

How is this relevant?

Recently, data has been released which has characterized the latest unrest in the Middle East as the underlying driving fear which has propelled recent speculation.

Furthermore, the reports claims cite that as much as 20% or more of the current price of a barrel of oil is attributable to these sorts of speculation.

Aside from much of this which comes from hedge funds, there are other components comprised of actual consumers such as airlines and fleet servers which rely on hedging much more than shear pure speculative (non-consuming) traders. This mix tends to exasperate the actual elasticity within the market place for which the reports pin-point the speculators’ roles affects …in the wake of turbulent global turmoil.

In the past, response to these affects impacts have causes some frantic calls for action …which, when taken …in the moment of the emotional duress …may result in unwise impulsive …knee-jerk reactions.

These calls merely may temporarily shift the burdens from one hand to the other much like borrowing from Peter to pay Paul.

This very aspect is reason enough to consider better alternatives which in support of economic freedom …offers greater choices …and result in lowering America’s dependency upon crude oil.

Therefore, any emotional calls made upon and for Washington to enact windfall profits taxes upon the companies who are engaged in oil and gas production …are counterproductive as well as obviate the potential for pursuing better paths which would, could and will lead promise to deliver greater hopes to achieve energy independence in a balanced, more comprehensive national energy program.

The Taxation argument makes as much sense as penalizing auto manufactures for failing to take responsibility for their customers’ reckless driving habits.

Conservation …or demand destruction is by far a better immediate 1st opportunity.

Begin by thinking about how unfairly such a tax’s unintended consequences would be certain to penalize all who use petroleum products …consumers as well as those engaged in industries which involve and revolve around shipping and air travel for just a couple of examples.

There is additional data which would suggest that domestic production under such a harsh course would only serve to lower domestic production …while raising US dependency upon imported oil.

Go figure …and at the same time consider the following reports’ findings and data:  

But remember, Washington is not likely to as much to serve the people; so …until 2012,

“…We the People …” needs must take things into our own hands in order to “…form a more perfect union …”

Let Americans stand together in unity. Therefore, join together and consume less …and destroy demand more …more …more …!!!

All the best,

Bill

http://en.wikipedia.org/wiki/Windfall_profits_tax

http://blogs.wsj.com/economics/2008/08/01/is-windfall-profits-tax-a-green-proposal-in-disguise/

http://www.commondreams.org/headlines05/1028-01.htm

http://www.ten-law.net/modules/com_artforms/startdownload-windfall-profits-tax-of-1997.html

http://www.commercedictionary.com/definition/windfall-profits-tax.html

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102×3629260

http://www.capitalgainsandgames.com/blog/pete-davis/435/bill-archer-windfall-profit-tax

http://www.sonecon.com/docs/studies/windfall_1105.pdf

Obama & such = taxes

http://www.reuters.com/article/2008/06/09/us-usa-politics-obama-idUSWAT00963020080609

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