Saturday, May 3, 2008

Gas Prices hit new highs - Impact to the Economy??

Evidence shows time and time again that when oil/gas prices hit new highs the economy hits the brakes in a hurry as it reduces disposable income by $20-$40 a week for each American household.

Crude oil now trades at over $112 per barrel and, as the below illustration shows, the cost of one gallon of gasoline has just surpassed the inflation-adjusted peak of 1981. They say this is due to increased global demand, geopolitical tensions, and a declining US dollar. I would say it is primarily due to #1 & #3 with speculation in there as well. If we were to show a concerted effort towards balancing the U.S. Budgets the $$$$ would appreciate and commodity prices would come down quickly

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Dan Ross

1 comment: said...

A follow up to this article. On my trip to Port Aransas Texas gas prices were "COUGH, COUGH" a bit tough to take but still cheaper than flying.

$3.85 consistently for regular gasoline....three tanks @ $68, $75 & nearly $70 respectively vs. $450 to fly + a rental car made the decision an easy one. I hate not being able to not control my destiny (ie. I want to do whatever I want to do, when I want to do it, etc) so a rental car cost would have come into play.