The Shocking Reality of High Gas Prices

Coming Soon to Your Neighborhood

Everyone has an opinion on how to lower gas prices. People have resorted to:

• Prayer
• Promotion of Fuel Efficient Vehicles
• Rebate Gas Cards Upon Car Purchases
• Price Caps
• Use of Gas Price Comparison Tools
• Consumption of Local Produce

But the historical gasoline price charts don’t lie.

Historical US Gas Price Chart from 1972 to 2008

Considering that US gasoline prices now have reverted to historical price levels circa 1980, I think gasoline prices will rise as long as the US dollar loses value in comparison to the rest of the world’s major currencies.

Historical US Dollar Index Chart from 1972 to 2008

What’s the Relationship Between the US Dollar and Gasoline Prices?

When the US dollar rises in value, gasoline becomes cheaper.

When the US dollar loses value, gasoline becomes more expensive.

Gas Price Solution: Increase the Value of the US Dollar

One of the main keys to increasing the value of the US greenback is to fix the trade deficit issue. The current US trade deficit is $247 billion dollars. This means that we import a surplus of $247 billion worth of goods than we export.

And when these foreign economies continue to receive an abundance of US dollars, naturally they become less valuable to them (basic supply and demand theory).

Our Solution: Promote US Business Once Again!

Buying products “Made in the USA” is a great way to support the revival of the US Dollar. However, The USA has become lazy/greedy, and outsourcing has destroyed the value of our greenbacks (Think about Nike outsourcing goods from Eastern Asia to Sell in US Stores). The USA must produce products that foreigners want to buy. That is the only safe way to increase the value of our dollars. Otherwise, foreign economies will drop the US Dollar like it’s hot.

What’s the Worst Case Scenario?

You tell me.

Comments

[svkoho:]

Well written article stating what should be obvious to any student of the issue. The dollar will not recover from the destructive big government deficit policies of this administration.The egregious omission in the article is the cause of the trade deficit. By far it's imported oil which is near 15 million barrels per day. Multiply that by $100-$120 to get the daily hemorrhage.Cutting imported oil is the only practical way to reduce the deficit and improve the dollar. The administration and the candidates are fiddling while the country burns.

2008 May 07 09:32 AM

[Nick Gogerty:]

Gas is $10/gallon in the UK and has been for awhile.

2008 May 07 09:32 AM

[Tom B:]

It'll never happen, but I'd love to see import tariffs on Chinese goods. Consider that they have NO regard for the environment and undercut the US by a lot on wages. AND they are the key contributor to our weak balance of trade. I'd be more than willing to pay a bit more for socks or stress balls to help my fellow Americans and bolster the US economy. It is VERY MUCH in the US's interest to keep jobs here. Already, we are seeing "knowledge jobs" (IT) leaking over to China. What's left after manufacturing and knowledge leave? Does everybody have to be a CEO, an MD, or a burger-flipper?

2008 May 07 10:20 AM

[Jimbo:]

That nice man Bill Clinton vetoed drilling in ANWAR. Ted Kennedy, tender soul, doesn't want windmills to spoil his view of the ocean. My fellow Floridians expect Texas,Louisiana, Mississippi, and Alabama to provide the natural gas for 23% of their electric grid. For God sakes, don't drill in the Gulf(Fidel Castro will do that for us). Most of Congress wont approve using publicly owned lands in the Mountain West to develop hydrocarbons. And then we decry the importantion of oil and the debasement of our currency. This country seems to have succumbed to mass insanity.

2008 May 07 02:35 PM

[Tom B:]

"Ted Kennedy, tender soul, doesn't want windmills to spoil his view of the ocean." As someone who generally APPROVES of Kennedy, that one really irks me. They are 5 MILES out, in the plan, and they are not ugly. I think Cape Wind won the court battles, though, last I heard.

2008 May 07 02:40 PM

[Piggybank:]

Become energy independant. Fill youre country with wind mills and solar panels, and drive with electricity from it. Gone is the trade deficit due to energy import, and with low cost energy and transportation youre products become more competitive to the outside world. America still has the brains and the technoligy advantage edge for the moment, better make te best of it.

2008 May 07 02:50 PM

[Tom B:]

"Fill youre country with wind mills and solar panels, and drive with electricity from it"

Technologically "do-able", and more economically feasible with each passing day. BTW: concentrated solar to heat turbines might be even better than solar panels.

Oh, but it'll never fly. It won't make Bush's fossil fuel golf buddies any richer.

2008 May 07 03:32 PM

[Charlie Peters:]

Should America consider a "fee" on corn fuel ethanol use?

* Lower price for food, gas, water, beer, cleaner air… and… funds for the budget from oil profit

* What was the cause of death of Alexander Farrell, 46, expert on alternative fuels?

www.sfgate.com/cgi-bin...

* Was Dr. Russell Long/REAP/Pavley 2002 CA tailpipe bill for corn fuel ethanol, Bill Jones’ Pacific Ethanol business?

* Clean Air Performance Professionals (CAPP) supports a Smog Check inspection & repair audit, gasoline ethanol fuel cap and elimination of dual fuel CAFÉ credit to cut car impact over 50% in 1 year.

* Some folks believe ethanol in gasoline increases oil use and oil profit

* Ethanol uses lots of water

* A Smog Check audit would cut toxic car impact in ½ in 1 year. Chief Sherry Mehl, CA/DCA/BAR, has never found out if what is broken on a Smog Check failed car gets fixed.

* An ethanol waiver would stop a $1 billion California oil refinery welfare program coming from the federal government @ $0.51 per gallon of ethanol used

* About 60,000 barrels per day of the oil used by cars is allowed by the "renewable fuel" CAFE credit

Clean Air Performance Professionals

2008 May 07 03:42 PM

[Charlie Peters:]

Google "Ron Paul"

2008 May 07 03:52 PM

[surgcare:]

TOUCHE'

2008 May 07 05:00 PM

[Indyphil:]

Ted Kennedy wasnt the only one blocking the wind farm, Mitt Romney was right there with him. Both parties representatives and politicians are equally guilty.

How does the author explain the dollar gaining 2% in april, while oil rose 10%? Sure its about the weak dollar, keep telling yourself that and that way you wont feel so bad filling your SUV?

Any serious student of the situation knows that the dollar value is important, but also isnt the only variable that sets the price of oil and gasoline.

2008 May 07 09:04 PM