This month, an informative video by Rodney Johnson, President of HS Dent, an economic forecasting firm, went into specifics regarding the supply-and-demand of oil and how it affects gas prices. The surprising takeaway: It doesn't! Johnson shows that while demand has steadily increased over the years, so has the oil supply - climbing almost in sync with the rise in demand. So if the two explanations cancel each other out, then why are prices at the pump still hitting our wallets so hard?
Alternate theories abound, from instability in the Middle East to credit card surcharges at the station. But what few are talking about is the connection between the Federal Reserve and the world's central banks flooding the economy with printed money and the rise of gas prices.
It's not only Johnson and HS Dent that are sounding the alarm: George Will has said, "As long as we're promiscuously printing dollars and the value of the dollar is going down, the price of oil and the price of gasoline is going to go up. So blame the Federal Reserve while you're at it." Last year, an op-ed at Forbes.com stated it outright: "The price of oil and gasoline are up because the Federal Reserve has driven the value of the dollar down."
If we're to believe the mainstream media, a whole host of factors go into the price of gas, all of which are somehow all working against us at the same time. But if you hear hooves behind you, do you assume it's a horse or a zebra? They sound alike, but one is far more likely than the other, so simple logic tells us we can safely assume it's a horse. Luckily, we still have people like Johnson to call a horse a horse.
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