We need to look at the real reason that oil prices are going up. No, it's not a supply issue. It is also not due to speculators, and for the majority of price increases, it has very little to due with the cost associated with taxes (although that is a real problem we have to fix.) The problem certainly isn't the treat of Iran and it's statements about the closing of the Straits of Hormuz.
The problem stems from the Federal Reserve and the creation of fiat currency out of thin air that has caused the price increases of oil. This has slowly happened over the 100 year history of this private banking system that Congress gave power to in managing our monetary policy. Not only have gasoline prices gone down in terms of real money i.e. gold and silver, but everything you buy and sell has as well. The reason you don’t see this is thanks to the flood of dollars being created on a minute by minute basis, thanks to the Federal Reserve. This creates price inflation i.e. more dollars chasing the same amount of products and services, while the annual salary of the majority of folks in the nation stays the same. This is also happens to be a huge factor for outsourcing manufacturing jobs.
Oil per barrel on January 2, 1986 was at $26.00. The price of gold and silver per ounce at this time was $336 per ounce of gold and $5.81 per ounce of silver at this exact time frame as well. This works out to 0.077 ounces of gold would buy a barrel ($26) of oil on January 2, 1996. During this exact same time a barrel of oil would sell for 4.48 ounces of silver. Now look at a barrel of oil at today's price of $106.75. The latest price for an ounce of silver and gold is as follows: $31.54 per ounce of silver and $1,651.00 per ounce of gold. This means that a barrel of oil will sell for 0.065 ounces of gold. If you price it in terms of silver per barrel, it will sell for 3.38 ounces. This is a drop in price in terms of gold by 16% and in silver it is a drop of 25% in price. As you can see, pricing in dollars is the only thing keeping prices high in the oil market. So if politicians like President Obama, Newt Gingrich, Rick Santorum, or even Congress, wanted to do something about the price of oil and gasoline they could do a great deal by shutting down the Federal Reserve and reverting us back to a pure gold and/or silver currency. This is could be easily done thanks to computers and debit cards. Peter Schiff’s Euro Pacific Bank debit card is a great use of this technology. It allows an individual to save their money in gold and/or silver. Than they can use a debit card to purchase goods and services with those grams of silver/gold which will be converted to their corresponding dollars amount which will be deposited into the vendors account.
The first product that all Americans purchase directly, or through other products, is corn. The price of corn per bushel in February 1986 was priced at $2.37. This would mean that if paid with an ounce of gold and silver in 1986 ( $336 and $5.81). You would be able to buy 141.78 bushels with one ounce of gold and 2.45 bushels with an ounce of silver. Now in 2011, a bushel of corn goes for $6.50 a bushel. With gold and silver being sold at $1651.00 per ounce of gold and $31.54 per ounce of silver you would be able to buy 254 and 4.85 bushels. This is an increase again in purchasing power, of gold's purchasing power from 1986 to 2012 increased by 80% and silver increased by 90%. As you can see, the only thing that has increased again is the price in dollars. You can conclude that the dollar is the only thing that has increased in supply, if you look at it from a supply/demand perspective.
One more example is the housing market, which prices increased at a breakneck pace until the 2008 crash. The home median price in 1986 was $86,600 in January of that year. In 2010 the same home's median price was recorded as $212,300 in October 2011. Again, to price this out in terms of gold and silver in 1986 prices ($336 and $5.81), you could buy a home for 257.74 ounces of gold and 14905.34 ounces of silver. In 2012 terms (2011 for median home price as this is the latest data) the prices are as follows: 134 ounces of gold and 6,731 ounces of silver. That is an increase in purchasing power of gold by 90% and silver of 121%.
There are countless examples where the supply of the products and services that have become cheaper due to technology and efficiency over the years. Yet they have been obscured due to the force of the government to use the fiat currency, known as a Federal Reserve note, as the only currency allowed as legal tender. If anyone in Washington wants to make a difference in the price of gasoline, healthcare, and a whole host of other issues that are plaguing this nation, they would do citizens a great service by abolishing legal tender laws that forbid anything but Federal Reserve notes be used in transactions of goods and services. This would be a huge first step to repairing the economy. The second major step would be to audit and then disband the Federal Reserve to allow for free market currencies dominated in gold and silver.