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Contrary To Popular Belief, Gas Prices Aren’t Rising

February 29, 2012 by  

Contrary To Popular Belief, Gas Prices Aren’t Rising

While politicians deflect, defend and blame and consumers grouse about Big Oil, large profits and offshore drilling, almost no one is discussing what’s really happening to the price of gasoline at the pump.

Conventional wisdom is that gas prices are shooting through the roof. But that’s not the case. In fact, gas prices are right at their historical average.

Gas prices are reflecting inflation. As I have explained before, inflation is not rising prices. It is an increase in the money supply. Rising prices are a product of inflation, and the increasing numbers on the signs at gas stations are a reflection of inflation. Or, to put it another way, they reflect a decrease in the value of the dollar.

This is explained in detail at Forbes. But following is a simple version.

Since Jan. 1, 1971, the price of a barrel of West Texas Intermediate (WTI) crude oil compared to gold has averaged 0.0602 ounces of gold per barrel. Gold is currently trading $1,789 per ounce, and WTI is trading at $108 per barrel. That’s a ratio of 0.0603, and it’s right on the statistical average.

So who or what is to blame for “higher gas prices?” Look no further than the Federal Reserve, Ben Bernanke (and Alan Greenspan before him) and their money-printing policies.

You see, gas prices aren’t rising. The value of those green slips of paper in your wallet is shrinking.

Bob Livingston

is an ultra-conservative American and author of The Bob Livingston Letter™, founded in 1969. Bob has devoted much of his life to research and the quest for truth on a variety of subjects. Bob specializes in health issues such as nutritional supplements and alternatives to drugs, as well as issues of privacy (both personal and financial), asset protection and the preservation of freedom.

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  • s c

    While you’re basically correct, Bob, your challenge is to get your in-house rockheads to realize that Uncle Scam is America’s #1 inflation engine. It’s also due to Ben the Boob and his ‘deep understanding of the Great Depression.’
    And, while you’re at it, try to soothe the working poor. Tell it to single mothers. Tell it to the millions who recognize a characterless poser in the White House without being coached by a political party.

  • JustAnotherJoe10

    Bernake is an idiot, and has apparently not been to the gas station or grocery store lately. Anyone that says that inflation is good for us has not a clue as to what he is doing-or dealing with, for that matter. This article is spot-in, and reminds me of Weimar, Germany, in 1929, when hyper-inflation was so bad food prices were doubling every 23 hours. People would immediately go out and spend their entire pay check that day, due to the loss of value of their currency. Comparing the parallels between then in Germany, and now in the U.S., I cannot help but wonder if this not a scenario to be played out in our future very soon.

    • 45caliber

      Just:

      Back in 1973 the government declared all prices and wages frozen for about a year. No increases were to be allowed.

      They sent a spokesman to tell everyone in business about it. His argument was that this would stabilize inflation (and it did) but if a company could not make a profit, the government would allow them to increase their costs enough to do so. And if a person needed a wage increase, they could either find another job or quit and then apply for their own job. (And people did both.)

      Someone asked why inflation was necessary and why we didn’t stay with frozen prices and wages if it was so good. After a lot of stuttering he finally stated that inflation was necessary – FOR THE GOVERNMENT.

      Increases in profits for a company due to price increases and increases in wages increased the amount of taxes that the government received without Congress having to raise the taxes. After all, if your wages went up enough, it would place you in a higher tax bracket.

      • independant thinker

        “And if a person needed a wage increase, they could either find another job or quit and then apply for their own job. (And people did both.)”

        Depending on your position the companies also transfered personnel to a new location and gave you a raise. They could call the transfer a promotion.

    • rb

      I strongly believe this is a scenrio that will be played out shortly. From all appearances it is the intent of this government to have complete economic failure to install governmnet more fitting to the wishes of the powers that be. Hopefully America will wake up before the secret police are at her doors. It took Germany just six years to be transformed from a democracy to the horrors of the third reich. We are half way there.

      • jetstream

        Agreed.

  • 45caliber

    Inflation may be driving the gas prices up but it certainly isn’t driving my income up. So as far as I’m concerned the prices are going up regardless of the reason.

  • speedle

    Well Bob, I don’t necessarily argue with your basic point, but I’m not sure the price of gold relative to the price of goods support theory always holds up. It seems that we are paying considerably less for electronic equipment than we did when the price of gold was $750 an ounce. It seems that the price of real estate fluctuates independently of the price of gold as well as farm products, etc. I am not sure how well advised it is to take just one commodity (oil), and use it to prove a point.

    • rb

      Oil is traded world wide. Lower valued dollar….higher oil prices. Real estate is still basically local and not traded on the international market. Technological advances have brought electronic prices down. Cheap (slave) labor has kept tech prices down too. Farm products are traded globally. Commody prices are as high as they have ever been once again because of a devalued dollar. Food prices are currently through the roof as well. Exactly why the boys in Washington stopped considering food and fuel prices to figure the inflation rate.

      • speedle

        There is some truth to all you write here rb, but not all. There is little question the government has devalued the dollar (and plans more printing press debt payment), but that is not the main driver of global oil prices. After all, it is going up for all buyers, not just the U.S. If the price of gold dropped 25% in the next month do you really believe that gas prices would reduce at the same percentage. Come now.

      • independant thinker

        speedle the price of oil on the world market has traditionaly been calculated in dollars so as the value of the dollar changes so the price of oil will change. Of course there are other factors in play as well one being world wide demand and whether it is increasing, decreaasing, or remaining basicly stable.

      • Vigilant

        Short term spikes can be caused by volatility in the Middle East or elsewhere, regardless of the inflationary pressure of fiat money. Re a recent Dick Morris Report:

        “•Obama refused, until two months ago, to impose tough sanctions on Iran, increasing the likelihood of an Israeli attack. Already, speculation that such a strike might be in the offing is driving up oil prices.

        •The president’s veto of the Keystone pipeline and his refusal to drill in Alaska’s Arctic National Wildlife Refuge makes it crystal-clear to voters that there will be no relief coming from the north.

        •His stubborn refusal to issue deep-water drilling permits despite having officially lifted the moratorium he imposed after the BP spill is costing us hundreds of thousands of daily barrels in domestic production.

        •His relentless crusade against oil company tax privileges undermines our ability to explore, drill and produce oil.

        “As gas prices rise, President Obama owns them. His public stands against oil drilling are coming back to haunt him. After his approval ratings peaked at 50 percent, Rasmussen and Gallup both have him back in the mid-40s.”

        The tremendous increase in gas prices that may come about due to this instability and wacky policy may be the ONE thing that defeats Obama in November.

    • Michael H.

      While the low price of electronics may seem to be low in comparison, have you tried eating an i-pod lately?

      • speedle

        Nope, but I haven’t tried drinking gasoline either.

  • http://liberty Tony

    To Everyone:
    Actually, inflation has decreased. At the end of last year, inflation was at 3.0% now it’s down to 2.9%. Google inflation rates and you’ll see this. The real problem is the market speculators along with the oil
    magnates are artificially jacking up the price so they can make an
    ungodly profit. Thanks!!

    • speedle

      Technically the price of oil is artificially low because people keep buying it. When people stop buying it at the price it is selling for the price will go down. That is the way the market works. Unfortunately, politics and the strategic importance of oil and its related products have combined to negate the market process. Speculators are only an intermittent factor.

    • http://personallibertydigest Lee Kimble

      Tony
      Market speculators do what? They guess at the future price of a comodity right? So if the Government creates policy that limits the amount availible of a given comodity what do the speculators assume. If we had an administration that promoted energy production of all types not just wind solar ect.. they would not assume that the demand would far outreach the supply. If the department of energy actually followed its charter we would not be dependant on any body elses oil.

    • http://na Ron Paul or status quo

      Tony, please read the last sentence of the article, that’s all you need to know. It’s not just gas prices either, buy some groceries, watch your utility bills, oh hell, it’s everything. FED FED FED up with status quo. Oh yeah, Ron Paul 2012

      • Allan

        Trouble is “status quo” is not stable or constant – it is a trajectory to collapse. I could think of a harsher term, but I prefer polite public speech. I agree with you, we NEED Ron Paul, or the consequences will not be good…

  • noel

    OBAMANOS… not even Bush could outspend Obama…or out-promise him.
    “You can’t out-promise a DIMocRAT.”
    RMN

  • noel

    OBAMANOS!!!

  • Speedy-Turtle

    I suppose ANY kind of idiotic-leaning pseudo-logic COULD be made for the ‘Cause’ of High Fuel prices (such as this kind of twisted logic). But what you’ve completely FAILED to point-out, or chosen to Ignore, is the FACT that High Fuel Prices are The IMPETUS for Inflation. When Fuel Costs Increase, everyone is Forced to Charge More for Everything. Hence, Prices for ALL Goods and Services Increase BECAUSE of Higher Fuel Prices. Don’t you get it?

    • http://boblivingstonpl.wordpress.com Bob Livingston

      Dear Speedy-Turtle,

      As I have pointed out many times, including in a link in the article above, rising prices is not inflation. Go to the link above and read it, and search the keyword hyperinflation on this website for more. Inflation is an increase in the supply of fiat dollars. An increase in the number of fiat dollars dilutes the purchasing power of those dollars, just like pouring water into a gallon of milk. Therefore it takes more dollars to make the same purchase. You are the one who doesn’t get it, and I fail to see a reason for you to respond with ad hominems in an effort to cover your ignorance.

      Best wishes,
      Bob

      • Speedy-Turtle

        Bob,
        I’ll have to fight you on this one. You can pull crap from whatever ‘source’ you want, but the fact of the matter remains: Fuel is an ‘Initiator’ element for most ALL products and Industries. You can disgrace me all you wish, but blow it out yourass for doing it, because I know you’re BETTER than that. I’ve read LOTS of your articles; and enjoy your postings.

        Bob, with all Fairness, YOU need to Get It Right for a change.
        (You are NOT an All-Knowing God of World Knowledge ya’know)

        Best Wishes

      • independant thinker

        Speedy-Turtle instead of putting the cart before the horse you are letting the horse ride and you are trying to pull it. While the price of transportation (fuel as well as other costs) affect the price of the delivered goods inflation is causing the price of oil (fuel) to rise so that is why the increase of fuel prices is causing other prices to rise.

      • Allan

        Speedy-Turtle,

        I think you are wrong on this issue. Inflation IS the decreasing value of currency. Even Wikipedia says:

        “Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.[6] Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.”

        Thus most economists agree that steady inflation is caused by a growing money supply relative to production of goods and services, just like Bob says. And who controls the supply of money in the United States? – the FED and who controls the FED? – our federal government and anyone with enough power and influence to control our government and the FED. Because the dollar is STILL the generally accepted international currency we can still keep our printing presses running and our government operating. Once we lose that priviledge due to our abuse of the dollar, we will be in a bigger default than Greece is now. Remember Greece cannot print money. It does not have its own currency. It must use the Euro.

        In discussing the effects of inflation, Wikipedia says:

        “Purchasing power of non monetary items does not change in spite of variation in national currency value.

        Inflation thus has no affect on the real value of non-monetary items.”

        This is why as Bob states, the price of oil in terms of gold has not changed in 40 years.

        I believe as a nation we are financially really walking on thin ice in the middle of a very deep lake and the temperature is rising and we can’t swim…

  • Andy94538

    The original definition of the gold dollar is one Troy ounce of gold. The twenty-dollar gold piece contains one troy ounce of gold. Gold is stable. It is the fiat currency that is out of control. At the turn of the twentieth century, you could buy a single action Colt revolver for a twenty-dollar gold piece. Today, you can still buy a single action Colt revolver for a twenty-dollar gold piece. You cannot buy one with a twenty-dollar Federal Reserve note.

    That being said, we are using an unstable currency backed by nothing but hot air. I don’t give a damn what Obozo, the Federal Reserve, or anyone else says, unless the number of dollars I am earning increases with the inflation rate (an arbitrary index), gas prices are still soaring. For this, we can thank the Obozo “don’t drill here” policy, along with other antics such as killing the Keystone pipeline project, which made us overly dependent on Middle-Eastern crude oil.

  • ranger hall

    Americans are buying less, Because they cannot afford to drive more, So the oil companys jack up the price , so they can maintain the Billions in Profit. SO no matter how much the People try to save, The oil compans still make the Profit.
    Working people still getting screwed

    • independant thinker

      That only works as long as they have a market for the excess oil. If they have no market for the excess the prices will have to come down to reduce the supply at some point and that point comes rather quickly of they are selling very little of their product.

  • Speedy-Turtle

    The ironic thing is: Back in 2007 we Warned EVERYone that odumbo as Pres, (along with DamoRats like Nasty Pelosi and Scary Reid) would absolutely guarantee Americans ‘Higher Taxes’, MORE NEW Taxes, Out-of-Control Unchecked Spending, and of course, the inevitable result: ‘Inflation out the wazoo’. Did Anyone listen?
    Seems even the Medias don’t want to ‘Own Up To It’,,,, even Now.

  • ranger hall

    When the price of oil goes up, Everything else goes up, Only the people suffer.More for the rich less for the poor.
    I here about things getting better in this Country, Just would like to see Just one thing that is really getting better for the american people.

    • speedle

      It ain’t gonna get better Ranger until we begin the systematic process of dismantling the nanny state we have been constructing for the past 60 years. That process starts in November.

  • hitthedeck

    Of course it’s inflation! All this pointing fingers at the oil companies and speculators is a smoke screen to cover the socialist wimps that Obama supports. Hasn’t that been his plan all along, to blame everyone else rather than take credit for his own failure to put America on its feet? His experiment with our future has failed and he has nothing to loose except an election. He will leave the Whitehouse as a multi millionaire for playing piano on the nation’s cash register. It will take a decade to correct the damage he and his comrades have done to this country. As far as the national debt goes, that may take a century to correct. His policies are no different than Marx or Lennon! You take it all away and give back what you think is fair which makes you dependent on the government for an existence of bare necessities.

    • Dave

      If it’s going to take a decade to fix this “mess” which you think Obama created why did you expect him to be able to turn around the biggest recession we’ve seen in our lifetime in a matter of two three years?
      When no one is cooperating, the party of NO is just as much at fault. They wanted him to fail and they sure have helped it along.
      Y’all are blindered idiots speaking out of the corner of your little opinionated brains.

      • speedle

        Dave, you are doing nothing but bloviating ideology. You have nothing to back up anything you say. You spit out propaganda as if saying something would make it factual for a starting point in a conversation. There is nothing that Obama has done (or is doing) to turn around the economy. He is not interested in turning around the economy (only putting out B.S. that he thinks will get him re-elected). He is interested in control control control control over the Great ignorant Unwashed. We are to be fed, watered, housed and kept under control. People other than you readily see this, and don’t like it.

  • RichE

    I get 0.291728213 for 1971 using gold $40.62 and crude $11.85. Would you provide your numbers. Thanks

  • BHUDDA

    I’m on a fixed income and my income has not increaced to the amount inflasion has so I’m in a world of hurt . As an after thought gas prices have risson as our leader has manufactered the inflassion and it growing out of control .I notice the markets say without food or energy costs because both are out of control and helps the government look better .

  • pasofino

    WE PAY THE SAME PRICE FOR OIL REGARDLESS OF WHERE IT ORIGINATES! Price is being artificially determined by global monopolists, not by competitive supply and demand. Demand is not artificially controlled. Energy supply is not rationed. There are no restrictions on where you go, how you go, or if it’s necessary. We still race cars, play, & stay as warm or cool as we want… if you have the wealth to pay for it! We impose no restrictions on how much oil or energy is produced in other nations! In fact, the US loans foreign nations billions to drill in our own back-yard! The US has spent perhaps trillions in wars and outright gifts protecting foreign country energy resources! However, PRICE IS CONTROLLED BY COLLUSION (MONOPOLY)

    U.S. energy prices are artificially determined by global monopolists, not free competition! By officially prohibiting the free competitive development and supply of our unlimited domestic energy resources, the president and legislature (house & senate) have conspired to establish global monopolist control over domestic and foreign energy pricing within the US! A president and legislature that has the power to restrict supply also has the power to restrict demand (rationing), but they have collectively turned international predators loose on American citizens! Monopolist energy price increases have rippled through the economy with disastrous effects, including job loss, catastrophic debt to other nations, lowered US standards of living (especially the poor), and extreme compromise of national security! Our country is paralyzed! Has anyone in history done more to destroy this nation! What is treason?

    The remedy is blocked by two people – Harry Reed and Obama, not the current House! There are good legislators on both sides of the aisle wanting free competition, but they are overwhelmed by the monopolist corruption that has worked for years to sack our country. A potentially multibillion dollar election guarantees monopolist oppression, not Constitutional freedom!

    Yes, the same two traitors have conspired to destroy the dollar with fiat money and debt instruments, and a long litany of corruption and looting of the treasury. What is written of banking & treasury is true, but only a part of the global monopolist control that is in fact irreversibly destroying America… just like WWI Germany

    • independant thinker

      “WE PAY THE SAME PRICE FOR OIL REGARDLESS OF WHERE IT ORIGINATES!”

      While that is true on the surface an increase in supply will result in lower prices because of more oil in relation to demand.

      • pasofino

        The point is, global monopolists have been conspiring with corrupted US government officials to void US law and Constitution. It didn’t start yesterday! The conspiracy freely fixes energy prices to predatory levels that are bankrupting and destroying this country and its citizens! We have reached the point where the monopolists operate in the open, with obvious government protection!

        The president and senate leader (Obama & Reed) are using their “personal” official powers of office to single-handedly deny and obstruct competitive supply of our own national energy resources. If national energy usage must be reduced to protect citizens from excessive usage of a readily available resource, then demand must be rationed if competition and freedom are to be preserved! Instead, 1) domestic demand is not restricted, 2) global usage is encouraged by subsidizing foreign drilling, 3) monopolist supply increases are actually subsidized by unilateral presidential edict, and 4) the monopolist coalition charges US customers the same extreme predatory price for all oil, including US, Mexico, and Canada, as they see fit! Hundreds of trillions have been ravaged and plundered!

  • jerry1944

    with the goverment printing so much money it makes the dollor worth less and that make every thing go up but wadges and companys have to cur cost some where even layoff

  • James Fry

    IT’S YOUR FAULT…..IT’S YOUR FAULT….. You were afraid to call a spade a feaken spade. While he’s campaining, this POS bastard was asked what price he’d be
    comfortable with when it came to gas prices. HE SAID 7-8 DOLLARS A GALLON. Not $1.25 so that people could afford to buy things, or better things, OR FOOD for their children. No, HE SAID 7-8 DOLLARS A GALLON. And you dumb SOBs kept right on associating with the treasonist miscreants that voted for him. If you make purchases in your hometown, if you go to a doctor or mechanic, if you associate with a neighbor that commited that bit of treason, YOU ARE THE PROBLEM…
    HE SAID 7-8 DOLLARS A GALLON. HE’S ONLY HALF WAY THERE.
    GRAB YOUR ANKLES

    • old hillbilly

      right on – remember ross perrot (can’t spell) talking about that great sucking sound – well, thar she goes – everything the USA once represented… GONE – morality included The poor blacks who support him are hurt the hardest & have no hope or chance for something better.

  • James Fry

    Doesn’t anyone sign there own damn name? Man I hate yellow.

    • old hillbilly

      don’t mean to be smart about it, but don’t intend be mopping up the mess when some drugged up occupier decides to occupy my bedroom in the middle of the night – too old to kick butt or take prisoners

  • Chester

    When I can pump oil out of the ground and show a five hundred percent profit at eighty dollars a barrel, but am being paid only forty by the speculator who buys the right to take delivery of ten thousand barrels in three months, then he sells those rights to another speculator for sixty dollars a barrel, and that man sells the right do that oil for eighty dollars a barrel, it looks like I have made a real killing. I made a bit of money, yes, but not the five hundred percent profit I would have made if I had held the fights to that oil until time to deliver. Instead, I got some ready cash to pay my workers now and not three months from now, plus invested in a few thousand more feet of drill steel and pipe. In the meantime, two speculators have made twenty dollars a barrel profit each on that oil and never even had to sniff it.

  • Jimbo

    I’ve been telling people about this for years , and can’t understand why people aren’t screaming mad. Do they think goods and services go up in price all on their own? The Fed has for years been INTENTIONALLY creating inflation, on the whacky theory that flooding the market with devalued money creates growth. Besides making it possible for the government to pay yesterdays debt with goday’s cheaper dollars, all it does is destroy the savings of Americans. Think about it…. 5% inflation per year. What is that doing to the money you put in the bank, saving for that new boat, car, vacation, house or college education? It is no different than the feds forcing open your safe deposit box, and grabbing the money.

    Seriously…why shouldn’t the money you earn, and put aside TODAY buy the same goods and services TOMORROW?

  • Malcom R

    My mom and I had a discussion on this years ago. She said around that time, when she was working and going to college (without loans, scholarships or much help at all from family) she was able to afford things. I started crunching the numbers of what she was getting paid at the time, compared to refined at-the-pump gas prices at the time. I was astounded to find the price of gas versus minimum wage had quintupled since then.
    I found this on wikipedia.
    The minimum wage had its highest purchasing value ever in 1968, when it was $1.60 per hour ($9.86 in 2010 dollars).
    Could something like this be the reason the ranks of the poor are increasing, aside from the ranks of the unemployed swelling? I remember seeing a news reporter on nbc back in the 90s talking about how there was a study that showed the ‘income disparity’ between the various levels of earners was increasing, dramatically.
    Imagine, you raise minimum wage, which is in theory the least someone can be paid (but often not the practice, as I have somehow found myself working for far less at times) but not enough to keep up with inflation. Then you inflate the currency faster. What happens? The purchasing power of the poor decreases, as all those who are working for minimum wage, be it a college student, or a career waiter or delivery driver; and the purchasing power of the rich of course increases, because they continually skim off the excess by paying more and more employees minimum wage. The end result of a few decades of doing that habitually is what we see now. An ever increasing disparity of the rich and the poor, and more and more, those on the government rolls increasing as well because it’s a better income than working and spending ones money to try to make money at the minimum, especially with greedy managers who are looking for a promotion and bonus cutting their salary ever further. What can you do though, you need the money, so you keep working, even for so little, and invest even more of your time in a second job to make more minimum wage. It’s no wonder so many can’t afford a car, or the gas to fill it, anymore. Of course as well, you have governments themselves picking the pockets of everyone they can in this ‘financial crisis’ that somehow didn’t exist four years ago. They raise the fees, tack on extra fees, add more and more requirements, and fines if you don’t follow the new procedures to the letter just to get a license plate for your car.
    If you really think about inflation, it’s not much other than a tax. Every time a dollar is worth half what it used to be, your cash portfolio is worth half what it used to. It effects everyone across the board, but dollar for dollar not person for person. It’s an income and savings tax like none other, and perfectly proportional in its effects on the rich and the poor.
    I am one of the 98 per cent for sure, fitting the definition like not many can. However, I have never received unemployment benefits, food stamps, or any other assistance, even though I was at times eligible for most if not all of them. I never applied. The only benefit I’ve ever had was a little refund on my income taxes, or an earned income credit, whatever that is. I don’t say this to pat myself on the back, rather, as a thanks to my friends and family who have helped me through tough times, and as I have helped them. Good luck to us all.

    • T i m

      The reason for raiseing minimum wage , is to raise the income ovabove it . it has nothing to do with the minimum wage . make a typo mistake , then correct it , watch the word processor move all the letters , to make room for the new information . Minimum wage increase was intended to move up the next level up , higher . ….Cost of living generally changes , when commerce department hints at c o l going up . There fore , minimum wage increase does nothing, except for the higher wage bracket . My name is T i m

  • http://gravatar.com/revnowwhilewecan RevNowWhileWeCan

    As I’ve stated before, the answer is the re-printing of a new currency as in the idea of the “greenbacks” with Lincoln. The gold standard is only a temporary solution as the wealthy would still gain control. If we closely monitor the quantity then we could easily overcome the current economic crisis. The reason this would work is that it is not WHAT backs the dollar but WHO CONTROLS IT’S QUANTITY. If the gov’t wasn’t corrupt and could closely monitor it’s quantity instead of giving that power to the Fed. Res., we could gain equilibrium and a new fiat system would again be sustainable.

  • Allan

    I find it really ironic that Obama and all the occupiers complain about the shrinking middle class, when the inflation caused by government is the primary reason for the erosion of purchasing power and the resultant shrinkage of the middle class.

    Now that I recently retired, by biggest fear is the erosion of my savings. An erosion caused by direct taxation at all levels of government (federal and state income taxes, federal and state sales taxes and local property taxes with the inevitable increase in all rates) and the indirect taxes via government caused inflation.

  • Pete0097

    I think that you have your cause and effect backwards. Gas isn’t up because inflation is up, inflation is up because gas is up. THe price of gold is fear related. People are buying gold because they are under the wrong opinion that if there is a crash, their money will be safe in gold. The truth, You can’t eat gold. If farmers see no value in selling their product, they will barter it for what they need for their families to survive. Without an industrialized society, gold has no value. For the first time in history, gold has more value for something other than beauty. It is used in electronics probably in excess of what it is used for jewelry.

  • T i m

    Last I read , Ron Paul wants to get rid of commerce department , which is the governemtn office sets the rate on all cost of living . As I do not completely follow, the speculators part of this , Obama asked the commerce department secretary 1 st of last summer , what to do about jobs. There is a simple solution to American economy , you are wearing it . Newt Gingrich wants to drop gas price near $ 2 . 5 0 per gallon . From what I know of it , real price should be around $ 1 . 0 0 per gallon . He must overcome commerce department to do that . Gas price and all other cost of living goes up , because commerce department wants the sales tax . F Y I , There was no oil shortages in the 7 0 ‘s . I was riding the boat , bring the stuff in to America. 1 st job I had in high school , full service gas station . I sold it for $ 0 . 1 1 cents per gallon . Congress declared an oil shortage to force America to go buy a smaller vehicle . It had nothing to do with oil shortage . Commerce wanted the sales tax off the sale . Barel of oil used to measure 5 5 gallon . Today it is 4 2 gallon . That causes a lot more consumption , just in numbers . Commerce kept the 5 5 gallon drum price for the taxes . take out the ethanol and its taxes . See what you get My name is T i m

  • Jason

    I can’t competely agree. When gasoline prices can increase by 50% in a month’s time I don’t think that’s reflective of inflation. If you’re referring to the average increase in gasoline prices, according to the department of labor statistics $1.10 in 1990 had the same buying power as $1.91 today. However, gasoline was hovering around $1.10 in 1990 and is well over $1.91 today.

    While the inflation rate may very well be based on the amount of money in the market, the amount of money printed must be dictated by something and THAT’s the root cause. Bernanke’s problem is he’s printing money for the wrong reasons.

    • Bill

      You have a point about the “rate” of gas price rise and it not being tied to the apparent rate of inflation. The gas price IS rising much faster and the rate of rise is not consistant like grocery prices seem to be.

    • James

      The United States grew up around the automobile, it made possible commuting to work, many times, miles away. We are dependent on gasoline, and periodically the retailers raise the price until sales fall off, then back off a few cents. That’s how they find out what it’s worth.

  • EddieM

    Let me get this straight….the $4:29 a gallon I paid at the local CHEAPEST gas location was NOT an increase from the $3.69 I paid less than a month ago. I KNOW that California is in the tank but attemping to live on a small retirement and social security are not covering these non-increases. Where to we sign up to get rid of the Federal Reserve and people like Bernake??? He and Obama both must go at the earliest possible date before these NON-INCREASES starve the American Workers – and I don’t mean American UNION workers who have obama in all four – or 5 of their pockets!

  • Bill

    Bob Livingston, I believe there are factors involved in the dollar value/inflation rate, which seem to be missed by all. One is the “global” market into which our government (“borrowing” from the FED) is pumping newly printed dollars (paying debts). That market is growing at an exponential rate; that is, the population of those involved in this market has increased exponentially. Both China and India for example have added many hundreds of millions of people to this market over the past fifty years. Therefore, if no dollars were added to “the system” dollars would become extremely scarce as the limited supply was spread between more and more people. As long as the dollar remains the world standard for trade, a “population adjustment” MUST be applied to balance the system (market). Ideally the dollars add rate is equal to the population increase. I am not aware of any formula or reference standards for calculating this rate, and wonder what methodology is used. I am quite certain that this concept of population adjustment is what has saved the United States so far from the disastrous inflation rates that have historically hit “money printers” like the FED (i.e. Germany and Argentina). When the population rate of growth is exceeded or the dollar is no longer the market standard of exchange – THEN we are doomed to inflation disaster. – - – So the question becomes; where are we in this market balancing act? Does anyone know?

    • James

      Bill, when I was a child, I could buy a double-dip ice cream cone (of real ice cream, there were no substitutes back then) for a nickel. Now, a similar cone costs $2-3, that’s inflation.

  • Speedy-Turtle

    YES, I agree; it’s all about inflation; that’s not my point here.
    American-Thinker: You said it yourself. The increase of Fuel Costs have a Direct and Proportional influence of all goods and services. This is because not ONLY do we rely on Fuel to Deliver Goods, we also rely on Fuels to import and Produce every Product and Service-Related element,,,, every single step of the way,,,, coming and going. Fuel is an Initiator Element; to DO anything, it requires Fuel of some sort. So when you accuse me of “Putting My Horse IN The Cart”, IMHO, the thinking that Current Fuel Increases are “Just a Matter Due to Inflation” IS a Classic example of such a parody.
    Allan/ American-Thinker: Excluding Political Issues for a moment, Do you not remember What was the First Thing that REALLY Shot Up in cost, almost across the board?
    In a phrase it was “First Out Of The Gate”. It was Gasoline and Diesel. (remember).
    The prices began rising dramatically, and rather rapidly sometime around 2009-ish.
    Knowing that any Economy operates like a ‘Wheel’, where everything is relationally Tied together, it becomes very difficult to look at the wheel later-on an distinguish Which Element actually Started ‘added momentum’.
    A Wise Professor once stated: “Statistics Can Be Made To Support Any Notion That Any Author Wishes Them To.”
    Please do not believe every single chart or Stat that you see; especially if it comes from Wiki, or Snopes.

    Obviously Folks, on the surface it would appear that we’re arguing the same tired-old “Chicken & Egg” thing here. But this one is more recent; and I’m trying to prompt everyone to Remember One of the elements that Started This Inflation. I’m also urging each of you to not always believe everything you read on the Inet; but rather rely on your Brain, your memory, and your Own Reasoning Powers.

    Now don’t get angry, and Pop-Off with some snide remark like: “Okay HotSh#t Knowitall, then enlighten us as to Who runs the World Economy and Who Caused the increases in Fuel Costs in ‘MY Wheel’ “?

    Let me answer this Right NOW: I readily admit that do NOT know every-@%$& thing, okay? And since the corrupt politics under our current administration is SO extensive, I cannot and will not get into this element. That is beyond the scope of THIS article.

    Warmest Regards to My Fellow Conservatives

  • RichE

    1. Guys, all of your arguments are null and void until someone provides the numbers for 1971 that produce the .0602 ratio.

    2. I’m using $40.62 (gold) and $11.85 (crude) for 1971 getting a ratio of 0.291728213, 484% different from the article.

    3. Since the author didn’t include the 1971 numbers and no one has correct mine I’m calssifying this article to be bogus.

  • nick

    gas prices are whats creating inflation everything we buy is priced by delivery cost everything we eat cost more to grow and deliver. Call a service co. for your heating or cooling unit they have to charge more to get to your house,all services are effected by gas cost.

  • Netq32

    Obama is doing it on purpose. Does it really matter how?

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