Did I miss it?

The point, I mean...

Look, it's a fascinating view of what I think we both (and many others) have been referring to as the "slippery slope".  Start on the path, and it becomes harder and harder to deviate, until you are finally forced to admit that there is NO going back to where you started.  You have reached (and possibly passed) the point of no return.

If you are asking me if I think we have reached that point here in the USA... well, let's discuss that for a bit.

For years here on the Bund I have been bitching prolifically at the cost of gasoline.  Prior to Katrina (call it 9/'05 for argument's sake), the average national price for a gallon of gasoline was $2.31 (source HERE).  Last year the average was $3.68.  In 2003 (just ten years ago!) it was $1.60.

Fact:  The US produces a greater percentage of its own crude oil needs NOW than it has at any time since 1981... yet the cost of gasoline (the single greatest product stemming from crude oil) hasn't come down even 1% off peak.  (source HERE)  The price for a barrel of crude oil TODAY is $97.  It's highest peak was July 4th, 2008 at $145.31, and the corresponding high in gasoline was $4.05 (nationally).  By Dec of 2008, the cost of a barrel of crude was back down to $30... but gas prices remained above $3.68!!!  (source HERE)

Ryan defended this with the cry that profits are good.  I can't argue this point, I guess.  I don't like it, but I can't deny it, either.  It still smacks of gouging, if you ask me... but I digress.

Now, if you look at the price of a gallon of gas in relation to the price of a gallon of oil, there seems to be a great disparity over the last 30 years... but only if you look at it in dollars.  Compared to the price of an ounce of gold, gasoline is cheaper now than it was in 1994 ($1.06/gal).

That tells me that the value of MY DOLLARS has fallen so far that the price of a gallon of gas can't keep up with the rate of inflation!  Why?  Because the US is printing money at will... based not on value, but on debt.  Utterly and completely unsustainable fiscal policy that has been the status quo since the mid-term elections of 1994.  George Bush Sr. was the last President to insist on value-based Federal Reserve expansion... and we haven't seen it since.

So, can this be fixed?  Yes.  Revalue the dollar by restructuring the debt.  Each dollar you have today will be worth about $0.55 less tomorrow, but the dollar will represent actual purchasing value again (as any good fiat currency should).  Of course, the economy would tank like it hasn't tanked since Oct of 1929... but it would fix the problem.

Will this happen?

Not in a million years of Sundays.