Tuesday, November 09, 2010

As Dollar Inflates, Michigan's Gas Prices Rise

Unexpectedly, of course.

Fill-up fears: Michigan drivers face $3 a gallon at pump

Michigan drivers got hit with a 20-cent increase at the gas pumps this past weekend, sending the average price for regular unleaded fuel above $3 a gallon for the first time in two years.

At a time when fuel costs usually drop following the summer tourism season, statewide prices surged to $3.04 a gallon, AAA Michigan spokeswoman Nancy Cain reported Monday. "It's surprising that this is happening," Cain said. "It's very unusual."

Why the price spike?
The spike is being fueled, according to AAA and two Michigan economists, by a weak American dollar that causes the prices of commodities like food, metals and gas to increase because the American currency has less power to buy items from abroad — especially since the United States imports more than 60 percent of its oil supply.

You can't keep on with Quantitative Easing and putting more and more dollars into circulation and not expect commodities to increase in dollar value as a result as each dollar is now worth less and less.

No comments: