The demand for gas is very inelastic.  As you said people would be willing to pay $10, $20 or maybe even more for a gallon of gas if they have no other choice.  Given these facts is their anything to prevent investors from colluding together to drive prices up artificially?  As long as they all agreed to only release the gas back into the market slowly, maybe only at some kind of set price level, they could probably make a net return on their investment regardless of weather or not their is any kind of actual emergency.  I don't know enough about commodity markets to know if this is really possible, but the thought of this kind of situation concerns me.  

Not really. While it is theoretically possible, the sheer amount of oil makes it extremely unlikely that anyone could pull such a move. Most attempts at cornering a large market have ended up costing the people making the attempt a ton of money. Oil is extremely plentiful. The US alone consumes 20 million barrels a day. To imagine that you could buy enough oil to effectively control the market would require a massive amount of money and would certainly attract a lot of attention. I wouldn't think it would be possible to even attempt such a move without somewhere around $800 million to control 10% of the market for a single day. To carry out an effective corner for a month or longer you would be looking at  around $24 billion+. 

The far greater danger for oil prices is OPEC which produces somewhere around 42% of the worlds oil. OPEC is an Oligarchy that would be illegal within US borders because it actively engages in production controls to keep oil artificially high and leaves us in a real danger of Saudi Arabia simply deciding to screw us. The only solution to that problem is to increase production in non-OPEC countries.  

 The other thing that really bugs me about the oil debate is anytime someone suggests drilling the barren desolate place that is ANWR the democrat snidely replies "Well that would take at least 10 years". I doubt a profit motivated company would take ten years unless government permits slowed them down; however, even if you grant the 10 year time frame, they have been making that argument for at least 20 years....

I'd love it if these oil companies would start investing in their own alternative energy cars (electric, hydrogen, etc) instead of just trying to kill off the electric car industry as a threat to their profits. As is, there's no practical reason to buy an electric car or covert a standard car to electric - with the amount of money you'd have to pay, it would take 10-20 years for you to recoup whatever money you'd be saving by not buying gas.

Trump said we should go in and steal Libya and Iraq's oil and threaten Saudi Arabia. Tempting. Almost enough to get me to vote for him..... well not quite. 

Any evidence of that or should I buy you a tinfoil hat?

Exactly which company has a monopoly? Do you even know what a monopoly is? The only thing approaching a monopoly in the oil industry is OPEC which is an oligarchy and as I pointed out in the OP a major problem that we need to deal with. Either through force or producing our own oil. Other than OPEC, the oil/gasoline industry is extremely competitive although state pricing laws have prevented people from enjoying the full benefits of that competition. (most states have minimum profit laws on gas stations, where can't sell their gas at a loss or at least not a large loss.) 

Simplistic? No. But economics is extremely predictable. X goes in, Y comes out on a very consistent basis. When the government does A, B and C, it is fairly easy to predict the X, Y and Z will happen. You might recall that I predicted massive inflation would be occurring especially in the commodity markets several months ago when we first implemented QE2. Well, it is happening. Even our government is starting to admit it. 

http://www.rationalresponders.com/forum/27421

Have you seen the news stories about McDonald's having to raise prices? Others will follow. It is a decidedly bad time to own stock in any restaurant. I'm sure your boss is aware of the difficulties approaching the industry in the near future as food prices go up and customers incomes don't, which will cause a larger number of them to decide to save money by cooking for themselves.

I also offered some investment advice back in November, which if you had listened to me you would have done quite well for yourself over the last 5 months.

For the record, when I made that statement gold was $1,397 Silver was $26.74. Gold is now $1505 and silver $46.60 or 7.7% and 74% respectively. In other words, if you had invested a mere $2000 in silver because of my post, it would be worth roughly $3,485 today. You would have made $297/month profit without working. (Well a little less because of the actual fees/shipping involved in purchasing and selling the silver). And companies that export are the reason why the stock market is going strong. 

I also said,

The price of food has skyrocketed. For example, since November the price of corn has gone from $5.87/bushel to $7.37 a 25.5% increase. Oil has gone up from $87.22 to $112.29, a 28.7% increase. 

These things are predictable if you pull your head out of your ass and pay a little bit of attention to the business pages. Which makes it all the more sad that our President and all our other illustrious leaders are so "surprised" when things like this happen and run around looking for people to blame. What they really need to do is look in a mirror.

And you need to get past your prejudices and simplistic stereotypes to understand what is happening. Of course, people with money are trying to make as much profit as they can. That is what rich people do. They look at the world and see thousands of money making opportunities (at least I do) and they pick which ones they think will work best. Rather than blame them when they find one, you should look behind the curtain and see WHY they believe oil, food and commodities are money making opportunities. Because if they are wrong, and sometimes they are, selling short is a massive money making opportunity. Ask anyone who sold the mortgage market short when the conventional wisdom was still "real estate ALWAYS goes up". Eventually, gold is going to collapse too and many people will lose a lot of money. The trick is timing when to sell and realize your gains. 
 

Another thing, no it's not exactly a monopoly but I have a short story for you guys.

My dad owned a lawnmower shop back in the 80's (before they started using electronic ignition and plastic carbs). He sold lawnmower parts and small engine parts. One day one of the other 3 men who also owned a shop came in and had a talk with my dad. He discussed their pricing and suggested they, rather than compete, just normalize their pricing and go up a bit. Of course my ole dad was not as unscrupulous as this and sent him on his way.

Now you can pretend the oil companies don't play this game if you like but I think you may need a tinfoil hat yourself if this is the case.

edit: and yes when gas goes up everything goes up. The shipping cost on everything is directly related to the cost of gas, from a can of pork n beans to fruit of the loom underwear.

Thanks big oil.

That is called price fixing and is illegal under the Sherman Antitrust Act passed in 1890. Sure, it happens from time to time, mostly on a very small local level. On any kind of national/world scale it would be virtually impossible to even attempt. Why? Because suppose Exxon, Shell and BP decided to set the price high to make larger profits. They mark their gas up to $7.00/gallon, making big bucks right? Then what happens is that the evil greedy capitalist at Exxon comes out and says if we only charge $6.00/gallon, everyone in town is running to our stations, more money for us and suddenly they are slashing their prices down to compete. This effect used to be seen in the good old days of gas wars where companies would actually sell gas at a loss to compete with smaller gas companies. Most states have made that practice illegal with minimum pricing laws. 

Not to mention that Exxon, Shell and BP might be big oil companies in the US, but by world standards they are small. http://www.petrostrategies.org/Links/worlds_largest_oil_and_gas_companies.htm The largest oil companies are those that belong to OPEC. Which has engaged in price fixing in the past by reducing production. However, with this current spike they have not intentionally reduced production. In this particular case, the main cause is the weakening US dollar and unrest in the middle east. 

In other news, the EPA continues to deny new drilling permits. http://www.foxnews.com/us/2011/04/25/energy-america-oil-drilling-denial/#ixzz1KYb2WxDO 

Of course, I'm sure that will have absolutely no effect on domestic oil production or prices.

No, I'm saying that if you want lower gas prices increase production domestically or in stable countries so that the oil supply is secure and stable. Blaming "big oil" and evil profiteers is pointless and will do nothing to solve the long term problems. As long as the bulk of the worlds oil supply comes from the middle east- the most unstable area of the world- oil will continue to become expensive.

The other part of the solution is to take steps to strengthen our dollar so that it can buy what it used to buy. That means controlling our governments debt and stop printing new money. 

Until you approach the problem with realistic solutions, nothing will change. Economics is predictable, and she is a bitch. 

But making seniors pay an 6 k more for "vouchers" for heathcare, that kind of robbery is ok because we need a way to pay those desperate oil companies who made 18 billion in one quarter, tax breaks.

Makes sense to me.

GO EXXON! RA RA REEE STEAL FROM GRANNIE!

Well we agree on something.

 You can't always rely on "facts and figures" though and under the table money is called "under the table" for a reason and if you think big business does not stuff a politicians pocket you are in denial. Special interest's, special to who?

Until there is a mega crisis, change will be slow.

Over the last 2 decades, there have been dozens and dozens of design studies, and prototypes built and tested, with technologies that could be being implemented, to increase fuel mileage (among other benefits), and aren't.

The current technology, higher tech materials, processes, and smart engineering and manufacturing concepts, all exist, have been tested, and are being used in other industries to great effect (like aviation), in order to substantially increase fuel mileage.

Part of it is a mystery to me, and part of it is not, as to why it takes so long for the migration of these innovations to become the norm, in automotive.

Part of it is the American mentality of "Mo Bigga, Mo Betta", and part of it may have to do with the UAW.

Europe usually seems to be the leaders in changing paradigms, with Japan somewhat parallel, IMO.

One needs not look much further than under the composite skin of the Lotus Elise, to see tremendous potential to make cars substantially lighter, be able to use much smaller powerplants, and still far exceed levels of efficiency, performance, and longevity of most current vehicles.

Do you have data to back this up?

It's been argued that we are about 20 years behind europe, whatever is happening there will be happening here and in many ways this seems like a sound conclusion.

I believe China is now the second largest producer of steel, in the world.

They are also rapidly expanding in the manufacturing of plastic, and if the steep trend continues, they will greatly impact North American producers of plastic products.

If North America doesn't smarten up real soon, China will swallow up the US, and in turn, Canada.

From what I understand, there are very different trade policies between the US and China, as compared to the US and Japan.

The US is in bed with China, but it could end up costing everything.

As federal government spending and regulation has gone up, so has the amount being spent on lobbying. Not much of a surprise. I suppose you can argue that correlation does not equal causation, but I think it is approaching truism to say that the reason corporations spend money on politicians is because they believe the politicians can do something for them or can do something to harm them. Therefore, I draw the conclusion that giving the government more power over more areas will give a corporation more reason to attempt to bribe the politicians. I doubt many corporations give money to politicians simply because they like them as golf partners. If you do a little homework you will also see that there is a correlation between companies that donated heavily to the right politicians and those that received billions of tax payer dollars in stimulus. Coincidence? I don't think so. 

So putting figureheads in one's pocket earns a lot of free lunches. You're right, no surprise there.

How much do  lobbying expenses correlate to inflation?

From 2000-2010, the inflation rate averages to 2.54 (including 2009, which had -0.34%), so anywhere from a quarter to half of said expenses. How many new businesses become engaged in lobbying each of those years? Did lobbying lawyers demand a raise any of those years? 

There may actually be a correlation, but there certainly isn't enough data to ascertain that here. To borrow an example from the land of wacky fundamentalism™, supposedly there is a correlation between sexual liberty (a 60s thing) and crime rate.

There isn't anything of the sort, because crime has gone down steadily over the decades... and one might as well get a horoscope reading if they are going to inquire religious nuts about anything except tomorrow's forecast. But two sets of data could, at best, demonstrate that litigation has gotten more expensive over time.

Yea I didn't say I liked him. I didn't even vote and I wont untill someone worth a shit has a shot. I did want him to win just because I figured mcain would just be another bush and we needed to switch fuck positions. Obama has just switched to kind of a sideways fuck.

Isn't the whole point of having an economy to produce? Yeah, those who cause production make money. Amazing. Can you believe a financial system that rewards producers? We should have one that rewards consuming. That would be so much better, we could get rich just by using more stuff.  

1. Your proposal isn't going anywhere, anytime soon. It doesn't have any selling strength. You'll need to convince people  it's in their best interest to dispose of antitrust laws  and consumer protections. Good luck.

2. I kinda like having food and medicine that is safe to consume. So unless you can think of better/more efficient means of ensuring that...

3. I'd rather some of the bigger gov't bedfellows stay at oligopoly status. Anti-competitive practices being what they are, and all...

4. Lobbying is inevitable. It's natural for people of all walks of life -particularly the middle class- to organize around a common interest. There is no inevitable harm in that.

5. There is harm in a supreme court that (currently) votes solely in favor of big business on several key decisions.

1. No shit. Don't worry, I'm not going to waste my time/money trying. I gave up on the American people when Bush was elected to a second term.

2. Is there any reason why states can't perform those functions? In fact, every state already has its own laws and food inspection agencies, many of which are far more strict than the federal regulations. Personally, I don't trust food simply because it has a government stamp of approval. There are some places I don't eat at and some grocery stores I don't shop at, government approval or not. 

3. I would rather not have a big government for them to be bedfellows with. Government should be the referee not an active participant like it is now.

4. True, but I maintain that the more regulatory power there is, the more incentive there is to lobby. It is pointless to lobby someone who doesn't have power. 

5. There is harm in a Supreme Court that is making political decisions rather than legal ones. Even if I happen to agree with the political decision.

The entire post would constitute an argument, the one sentence you left in -a point- and the one part of the sentence you remain focused on, a soundbite. Nice try.

What does your completely unregulated market do to labor and consumption except eliminate a whopping chunk of their protections to prevent foodborn illness or... workplace accidents, transportation dangers, etc? These are all "regulations" that businesses seem unwilling carry out themselves.*

What does your ideology do to prevent one particular company from, say... acquiring in over half of a marketshare of a related product or sets of products of services? Yes, in a "free" market, different companies  can compete, but this doesn't stop one company from trying to corner an entire market (with little or no government aid.) It's been attempted before, and it will probably be attempted again... with likelyhood of success depending proportionately to a costly barrier to entry. We've seen limited amounts of success in the realms of desktop operating systems, defense contracts (Lockheed-Martin), oil (Standard Oil), steel (US Steel), and of course government-controlled electrical power. The one experiment at free market electrical power went south in a hurry, in no small part to a deeply criminal Enron directly manipulating the market forces at work. Luckily, Enron had a few whistleblowers in it's own ranks.

*The only historical example running contrary to this (that I'm aware of) is the MPAA of the early 1900s putting a strict, internal censorship of content believed unfit for the audience of that time. It was a remarkable demonstration of enlightened self-preservation, but it only came after movie producers saw what was happening to radio and early broadcast television. Then the "Miracle" decision came in the early 1960s, and the Supreme Court declared movies qualified as a "form of art", making the MPAA's self-regulation irrelevant.

Suppose you or another conservative owned a large plot of land. You are making lots of money drilling for oil and growing food on the land. Then a group of communist anarchists angry about high gas and food prices form a militia and take your land saying "you're getting rich doing nothing, we're going poor working our ass off."

Why in this case are conservatives so in favor of big government intervention to take back the land? Isn't most of the politics on the left and right just about getting special rights at the expense of others? Government by definition is the sovereign authority over a territorial area, so why can't they regulate how and by whom that land is used?

When have I said in this thread or any other that government shouldn't break up monopolies? The governments role precisely ought to be to ensure that a true monopoly can never take hold because a true monopoly is a threat to the free market. However, in practice, monopolies usually don't exist without government aid. This is even more true in the modern era where transportation is easier and you are really competing globally. Whereas you used to be able to have an effective monopoly in a town, now you have to monopolize at least a state if not the whole country.

Now I don't care if one company gets 50% or 90% or even 90% of the market share as long as there are no barriers that prevent another company from competing. If 90% of people want to buy from the company because they like the product better or it is cheaper I don't care. Now if a company is making it impossible for others to enter the business, for example suppose an oil company started buying ports and would only allow tankers carrying oil from their drilling into the port, then the government needs to step in. 

There is a gigantic difference between breaking up monopolies and having hundreds of federal regulating agencies. Part of my big beef with government regulations is that they make it significantly harder for an outsider to come into a particular industry. Even if you were a billionaire, you would have a hell of a time starting an oil company because of the red tape required to drill anywhere. By restricting the ability of outsiders to compete in a given industry, you encourage the development of monopolies/oligopolies, the exact opposite of what I have always argued the government ought to do. 

IIRC the curb weight on a current Lotus Elise is 1850 lbs, while a BMW M roadster is over 3300 lbs. The '96 Lotus Elise was 1650 lbs. The Elise meets US crash standards.

The cars do not need to necessarily become heavier, to become stiffer and stronger. That's a complete myth.

There's little reason we cannot be manufacturing vehicles that weigh 1000 lbs less than they currently do, and more economically, and out of more easily recyclable materials, and with longer average lifespans.

The technology has already been explored. There's simply no incentive for Amercian car companies to shift the paradigm.

Well, until the imports do it, and begin gaining market share...

Bullshit.

It's all about engineering, and better materials.

The C5 Corvette has a ladder frame chassis, like a pickup truck. Most cars are unibodies (monocoque).

The ladder frame in the C5 was a quantum leap in performance compared to the C4 ladder frame. The C5 was based on 2 single tubes that begin as mandrel bent tubes, that are later hydroformed in a die, and welded together with a few horizontal sections, and form a ladder frame over 4 times stronger and stiffer than a C4 ladder frame, and weighs almost 100 lbs less.

The floor of a C5 is a sandwich of balsa wood and fiberglass. The transverse leaf springs of the suspension are fiberglass. The body is made of a type of heat formable fiberglass composite sheet material called SMC.

The C5 is also easier to manufacture than the C4, as it has 30% fewer components. Around 1500 fewer separate parts.

Oh, and even though it has a 'truck frame', it weighs about the same as the BMW M Roadster, has a solid roof and rear glass, has more hp, and gets better gas mileage.

Very much so.

I saw a stat a number of years ago that between 50 to 55% of all new vehicles sold in the US, are pickup trucks. I don't remember if this included SUV's, but I was astonished when I read the number.

The government is not what is preventing small cars, or better engineered, lighter cars.

In Europe, the trend towards transportation, is completely different, overall, than in North America.

In Europe, mopeds are extremely popular for commuting, particularly around the city.

I remember my visiting my cousin in Sweden, over 18 yrs ago. He was driving a 1.1 L Ford Escort, and fuel was over $2.50 a liter US.

He just about fell over when he learned what the average displacement was for 8 cyl engines in North America.