Price of Gasoline Highest in More Than 2 Years :: Political News and commentaries

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December 7, 2010

Price of Gasoline Highest in More Than 2 Years

While Federal Reserve Chairman Ben Bernanke cluelessly rejects concerns that the Fed's pumping of almost a trillion dollars into the economy through its printing/digitizing money will result in hyper-inflation (i.e. QE2), the Energy Department said on Monday that U.S. drivers paid the highest price for gasoline in more than two years after the pump price soared 10 cents over the last week to $2.96 a gallon.

The take-home message here is that, thanks to QE2, our dollar is buying less gas. In other words, QE2 is essentially a tax on consumers that causes commodities to rise - we are already at the begining of hyper-inflation - thanks to Bernanke ... and that we should prepare to pay a lot more for everything from the gas we put in our cars, to the food we put on our tables and the utilities we cook it with.

As pointed out over at Financial Sense:

"The Dollar's decline is a result of the "quantitative easing" the Fed has been stepping up recently. Quantitative Easing is a fancy term for printing fiat money and exchanging it for long term good and garbage securities held by Wall Street firms, as part of the president's Working Group's activities. The money has debased the value of the Dollar, and found its way into commodities, stock and bond markets. At some point here, stocks will no longer remain in an uptrend, as the Dollar's debasement takes its toll. This policy will destroy purchasing power of households as households are not getting access to this additional trillions of dollars being printed by the Fed. Instead the money is going into markets and will be destroyed out of thin air as stock markets tank, resulting in the worst case scenario, too many dollars accompanied by a declining stock market. (i.e. Hyperinflation - Ed) According to the Fed's own balance sheet, it has pumped $1.5 trillion of printed money into the system in this fashion over the past two years. This policy has accomplished nothing positive. Obama's Chief Economic Advisor, Lawrence Summers, announced his resignation Tuesday. Central Planner policies during his tenure have been an abject disaster." (emphasis added)

As an editorial in California's Mountain Democrat noted last month in their "QE2 ain't a cruise ship":

The last time the Federal Reserve had an easy money policy Alan Greenspan was in charge. The ultimate result was a runup in gas prices as oil topped $100 a barrel and headed in the direction of $150. When gas at the pump passed $4 and headed for $4.50 a gallon people stopped driving. Tourism fell off a cliff. It's a good bet church attendance fell. When people stopped driving, except for work, they stopped buying things. Even grocery sales declined.

As people spent more of their disposable income filling their gas tanks to get to work they started falling behind on their mortgages, especially the ones who had taken on mortgages with introductory offers that were due to reset to a higher percentage after a couple of years. And especially those who had bought houses more costly than they could afford.

The consequences of this were the housing bubble popped and it all started with easy money from the Fed and then a rise in gas prices.

Did Ben Bernake learn nothing, or is he pandering to President Obama? The chairman of the Federal Reserve who took over when Greenspan retired is doing "quantitative easing." This is, in fact, the second round of quantitative easing and hence it is called QE2.

Like the title of the editorial says ... this QE2 ain't a cruise ship ... like the one that now sits in Dubai ... it's an economic risk going bad for all of us. So get ready folks for another rocky economic road ahead. From the looks of what we're already seeing, we're sure to see inflation that's not only going to see our meager dollars buy much less, but see the recession extended longer than otherwise expected.

Posted by Richard at December 7, 2010 4:44 PM

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