Here in South Dakota the price of gas has dropped below two dollars. I was wondering what the explanation for this was. I’ve been having an extremely difficult time finding an answer on the internet, why is this?
Also… All the info I have found on the subject seems to say that it is a result of a gloomy economy, or that it will result in a gloomy economy. Is this true? How and Why?
You’re having a difficult time finding answers on the internet because the answers don’t support the liberal agenda, only sound economics. Unfortunately for the media, because the world hasn’t changed, and oil is still an abundant resource that didn’t dry up overnight, it is not feasible to invest all our money in ‘green tech’ and oil alternatives that cannot compete on a cost basis with oil.
As to why the price of gas is now back below $2: (at least for you in SD and me in Texas)
The world is in a recession, oil prices have dropped from $140 a barrel to around $60-65. The slowing world economies have lowered demand for oil, and coupled with many americans now driving less because they had to deal with $4 gas (Europeans are laughing at us right now by the way), the demand for gasoline in the US had dropped. Hence, lower prices on gas. This is not causing a gloomy economy, but rather the result of the housing and credit bubbles that caused people to live on a budget they couldnt afford based soley on the rising value of their houses. These people, who henceforth will be known as morons, were unable to absorb an increase in commodity prices that accounted for maybe $100 a month. When the illusion of fiat money evaporated, and the morons had to pay the bill, they realized that they couldnt afford to put gas in their tanks. The media latched on to this and made it a huge story, while ignoring the real story of the Fed sending the entire world into a recession. Thats another reason we dont hear them talking about the lowering of gas prices. Austrian economists predicted the bubble, it’s burst, and the current situation, and the mainstream doesn’t want to hear our opinion because we blame it all on the Fed - which the media loves.
The media loves bad news. When the prices are dropping, there’s no story in it. Is anyone bemoaning the falling profits of the oil companies?