Accoring to the Associated Press gasoline prices have risen 50 days in a row.
Pump prices added a half cent overnight to a new national average of $2.679 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular gas has jumped nearly 37 cents in a month.
In recent years the Democratic Party and their allies in the liberal media establishment have told us the only explanation for high gas prices lies with Bush. It was his evil buddies in the oil industry that were conspiring to do this! Cheney and Haliburton were to blame! The Iraq war that we got involved in for the sole purpose of cheap gas somehow… raised… the price of gas… YEAH!
Now with Obama in the White House and massive majorities in both houses, what is the REAL explanation?
MORE BELOW THE FOLD….
Yes, oil companies make big profits on oil. However, when the price of gas went from around $1 to around $4 per gallon it was not simply becuase Exxon/Mobil was adding an extra $3/gallon to their profits. The price of gas didn’t come back down because they decided for some reason to make less.
Yes, oil supplying countries have restricted supply and increased price. Yes, increased demand for oil from China and India has increased price. However, the largest reason is the decline in the value of the dollar. When the value of the dollar is less, it takes more of them to buy things.
The dollar is declining for the following reasons:
1. The U.S. debt will probably rise to over $12 trillion. Foreign investors are concerned that the U.S. may let the dollar decline so the relative value of its debt is less.
2. The large debt could force the U.S. to raise taxes to pay it off, which would slow economic growth.
3. As more countries join or trade with the EU, demand for the euro will increase.
4. Foreign investors may want to diversify their portfolios with more non-dollar denominated assets.
5. As the dollar resumes its decline, investors will be less likely to hold assets in dollars as they wait for the decline to stop.
Inflation: The hidden tax built into deficit spending.