Why is gasoline so expensive?

I just read a report on what makes up the price of gasoline.

It was ok, and it did a good job of explaining what goes into the price, and it included the biggest expense:

TAXES.

But, it did not include the other hidden taxation costs – Quantitative Easing. Aren’t those 32 dollar words?

The Federal Government policy of putting extra money into the economy, that it does not have. Similar to ‘printing more money.’ Quantitative Easing (called Q.E. for short) reduces the value of the American dollar compared to other people’s money world wide.

So, rather than pay for everything at fair market price, they printed money and paid for it with dollars that are worth about half as much as they were 6 years ago.

So, in most international business, being an American now costs you about 30% more to do business than it did six years ago. Some areas cost a full 60% to 100% more than they did. (SEE NOTE BELOW).

Oil?

Oil costs about 100% more to buy today than it did six years ago. So, all prices are slowly going up.

The real surprise?

The world economy is doing so badly! Normally, a move this drastic and stupid would have caused inflation of 40% to 60% by now. (Inflation is mostly lost value of the currency.)

Instead, other world governments are complaining about the devaluation of the dollar and talking about moving to the Chinese, German, Euro, Gold, Russian, or British currency. But, since the Dollar is performing 30% better than it should, everyone is afraid to jump ship to a new currency.

Thank God, because it is not due to our government behaving well. It is a miracle the Dollar did not collapse.

What would collapse mean? $6 a gallon gasoline overnight. $10 a gallon within a week.

That is the real cost of gasoline – with the devaluation of the Dollar factored in.

So, the rich elite 1% of the world in Abu Dubai, the UAE, Saudi Arabia, etc. are able to buy MUCH less toys and other gadgets than they could if the dollar collapsed.

Welllllll. Not exactly. You see, they have billions of dollars sitting in bank accounts. So, if the Dollar collapses, they lose billions, immediately and gain back some value over time. So, they, and the other super rich world wide, are not trying to force the issue.

They are willing to take a short term 30% loss on the dollar value of their money accounts over ten years, and make up for that loss in profits over time. Said in another way, rather than lose 60% of a 10 billion dollar account today (lose 6 billion dollars), the elite are willing to have lost 3 billion over 10 years, because it allows them to continue to earn 40% profit each and every year.

They can then threaten to eliminate the dollar, because of its loss of 30% value over 10 years. But, they make that much profit each and every year, because of the dollar.

So, our price of gasoline is high, because our government is playing games.

Everyone else is complaining about our dollar’s value, but it is like the drunks who come to the party uninvited screaming, “Where is the free beer?”

America has produced the greatest economic advancement of the human race of our entire 10,000 to 40,000 history.

By the Grace of God.

And even though we have done so much for everyone else, their memory is truly short. And we are paying more for our gasoline, even though it is the American engine which has brought them out of poverty. Unfortunately, our government’s bad economic policies has added to the cost of gasoline as well.

What do you think?

Did I ramble too much?

Wayne

Note: I wrote the draft from memory, and then went out for some research. FoxNews reported that the Dollar has lost 30% of its value over ten years. 2002 to 2011. A reasonable ball park estimate for me.

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About Wayne

First, I blogged on blogger, then Myspace - soon I was consistently ranked. Next, I quit. Then the blogging addiction came back .... Comments are appreciated. Not nice comments are edited. You can follow me at the top right.
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4 Responses to Why is gasoline so expensive?

  1. I’m not saying your conclusion is incorrect, Wayne, but it’s not much help to know it if you don’t individually have any control over the price – and you don’t. What you can control is how much of the stuff you need. Move closer to work, use more public transportation, carpool, buy a car that gets better mileage or that doesn’t even use gas. You can’t personally prevent the gubmint from playing games. It’s too profitable for them. They get campaign money to keep doing it, and activities (like fracking) create jobs in their home districts. You can save most or all of what you currently spend on gas, depending on how much you adapt, and then the price becomes an irrelevancy.

    • Wayne says:

      I like that!

      However, all prices inflate with transportation ….

      Nasty gubmint ….

      🙂

    • vince says:

      Well you can start by voting for non corrupt poloticians. And honestly use LESS public transportation. People will stop buying as much gas . Prices will be raised. And besides I’d rather not give the govt more money or a reason for them to say the people need them for another public service. I want the govt to do nothing and go back to its three basic functions just like our founding fathers intended. Secure our borders. Protect us from threats both foreign and domestic. And promote commerce.

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