Tuesday, October 19, 2010

Phil Flynn: Paying the Price for an Economic Recovery

While the Fed tries to sell us the virtues of inflation, the poor consumers at the pump are getting soaked. As oil prices rise and French strikers strike, we see the national average retail gas price start to surge as the price increased to $2.834 a gallon which is the highest price since May 17th. Retail Prices have surged close to 14 cents a gallon in three weeks which just happens to coincide with the price increase that we have seen in crude since the September, 21 Fed meeting.

Since the Fed sent the signal that the printing presses were about to roll we have seen crude add over 11 dollars a barrel from peak to valley, a move that has had an immediate impact on the price of oil at the pump. Gas prices are 26 cents, or 10%, above a year ago while demand for gas hit the lowest level in almost 8 months. Demand for gas is running about 4.8 percent below last year while gasoline stocks are 4.3 percent above a year ago. The threat of quantitative easing, while giving the stock market a lift, is giving consumers the squeeze. A fine price to pay to save the economy......Read the entire article.

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