On rising gas prices

Of course, those same speculators were at work when gasoline prices went down, and especially nearly four years ago when prices dropped from more than $4 a gallon in the summer of 2008 to about $1.50 near Christmas that same year. One wonders, if speculation occurs, how it seems that speculators are involved ONLY when gas prices go up.

And, yes, I believe that when we have a commodity that is priced world-wide in dollars, and when the chairman of the Federal Reserve System openly attempts to shower the world with dollars, we are going to see price increases in things like crude oil and gasoline. Oh, and Krugman already has discounted that possibility.

William L. Anderson

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4 Responses to On rising gas prices

  1. when oil topped out at $145/bbl in June 2008, Bush announced the repeal of OCS moratoriums and began selling leases on federal land. By Dec that year (without one drop of that ‘new’ oil hitting the market) the price per barrel had dropped to $32. For the past 3 years speculators have watched this administration cancel Bush oil leases, shut down OCS and Gulf oil production and finance green energy theory….and they wonder why oil prices are climbing…

    • andyfrith2 says:

      There are undoubtedly supply and demand issues going on, however, we mustn’t ignore the impact of all the new money the Fed and other central banks have created. It’s very hard to determine how much of price increases can be blamed on one cause or another – but we need to keep both in mind.

      When central banks rapidly increase the money supply (eg via quantitative easing), investors and others will put more money into solid assets such as gold, oil and other commodities which are believed to be a safer store of wealth than stocks or securities, which are affected by the devalued dollar.

      • oh absolutely. Inflation is playing a huge roll in the price since oil is traded in USD. My overall point is the prices here in America is directly related to this administrations policy’s. Our Fed’s ‘quantitative easing’ I & II have not helped the situation at all. But just like unemployment they have changed the manor in which inflation is calculated. They claim it is at 2% when in reality it’s more like 8.

  2. andyfrith2 says:

    Yes, the changing of statistics every few years really doesn’t help. We’ve had that this side of the pond too šŸ˜¦

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