Tuesday, May 01, 2007

Cheap Gas? Not This Summer. Thanks, Fed!

Read this and weep.

Note that the price keeps escalating as you go further out on the calendar, by about 10% from current prices in April 2008.

To weep even more freely, read this one. Look at the middle of the chart, where it lists price/gallon of gasoline in pennies.

$2.24/gallon is what you pay for the stuff at the refinery. The rest of your cost is a combination of shipping cost, distribution/retailing margins (6% by law in Wisconsin,) and taxes. (Not to mention ethanol additives.)

There's a fair amount of chatter about why the price of oil is going up. Yah, there's more demand; but in addition, the value of the USDollar is dropping (pretty fast.) Seven years ago, the Euro was 83 cents to the dollar; now it's $1.36 or so. Finally, there are some nasty people in Iran, Venezuela, and Russia who want to make life a bit more difficult for the US.

So the Fed prints money like it's going out of style, which it has to do to monetize the balance-of-payments problem we have here. MZM (a sorta-substitute for M3, which is no longer a publicized number) grew at 8% in the last 12 months--but at 28% in the last 30 days.

Want to see where you SHOULDA been?

Check uranium in the last 6 months. From $55.00 to $115.00 since October.

Nuclear-fueled cars may not be cheap-to-drive, either.


Billiam said...

C'mon, Dad. Just come out and say it. It's going to get UUUUUGLY very soon.

Brian Michael Page said...

We're already nearing three bucks a gallon in RI...AGAIN!