Are High Gas Prices on the Way to come Back and Haunt Us?

Weak Dollar sends Oil Skyrocketing

In case nobody has been catching the recent surge in the cost of the Barrel of Oil:

From the New York Times

"But they say the most important factor is the falling value of the dollar, which is encouraging traders, institutions and foreign countries to invest their cash in hard assets like oil and gold. Oil is priced in dollars on global markets, and a falling dollar almost always puts upward pressure on oil."

Hmmm... Cash for Clunkers, Mortgage Modifications, First Time Homebuyer Tax Credits, Federal Reserve buying Mortgage Backed Securities, Bailouts, free money for all, etc, etc, etc...

Where does the Money Come From?

Borrowed and / or Printed Money resulting in a weak dollar. Oil is traded in Dollars and since there are more dollars (less value) going around... be prepared for higher gas prices on the way.

Weak Dollar Equals Higher Gas Prices ...

It has nothing to do with supply and demand and "everything to do with the weakness of the dollar," AAA South spokesman Gregg Laskoski said.

Gas prices usually decline in the fourth quarter. After Oct. 1, refineries switch to a winter blend that requires fewer additives and is cheaper to produce. Those savings are usually passed on to motorists.

In fact, gas prices have risen in the fourth quarter only once in the past 30 years, Laskoski said.

Gas Prices Jump 18 Cents in Two Weeks...

Something to think about before supporting Subsidies funded with Borrowed/Printed Money without thinking of the consequences.

I think most Real Estate Agents can certainly remember the drag we saw last time we saw $4 a gallon gasoline. Cities such as Las Vegas that rely on tourism certainly don't need it... especially right now.

To every action there is always an equal and opposite reaction....

Paul Francis, CRS
Prudential Americana Group
Las Vegas Real Estate - Summerlin Homes
702.592.3058