Pain at the Gas Pump
Posted by George Regal Categories: Business, US Economy
This issue was displaced somewhat by the current economic news, but it is still near and dear to our hearts because we feel it everyday! What’s behind it? If you’re tuning into the cable news channels you’ve probably heard that it’s greedy oil companies, speculators (an upcoming topic), increased demand in India and China, or because we restrict drilling. Well, which is it?
As much as I hate to ruin a good myth, and this one is a gem, it’s none of the above. Going back to my column on the Federal Reserve, we see that the FED lowered interest rates, and by keeping them there, money poured into the economy. Again, what happens when there are more dollars competing for the same number of (or, close to it) goods and services? Yep, prices rise. Gas prices have risen drastically, because oil prices have risen drastically, because the Federal Reserve has increased the money supply drastically
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