Coming Soon to Your Neighborhood
Everyone has an opinion on how to lower gas prices. People have resorted to:
- Promotion of Fuel efficient Vehicles
- Rebate Gas Cards Upon Car Purchases
- Price Caps
- Use of Gas Price Comparision Tools
- Consumption of Local Produce
But the Historical Gasoline Price charts don't lie.
Historical US Gas Price Chart from 1972 to 2008
Considering that US gasoline prices now have reverted to historical price levels circa 1980, I think Gasoline prices will rise as long as the US dollar loses value in comparison to the rest of the world's major currencies.
Historical US Dollar Index Chart from 1972 to 2008
What's Going on With the Relationship Between the US Dollar and Gasoline Prices?
When the US dollar rises in value, gasoline becomes cheaper.
When the US dollar loses value, gasoline becomes more expensive.
Gas Price Solution: Increase the Value of the US Dollar
One of the main keys to increasing the value of the US greenback is to fix the trade deficit issue. The Current US Trade deficit is $247 billion dollars. This means that we import a surplus of $247 billion worth of goods than we export.
And when these foreign economies continue to receive an abundance of US dollars, naturally they become less valuable to them (basic supply and demand theory).
Our Solution: Promote US Business Once Again!
Buying products “Made in the USA” is a great way to support the revival of the US Dollar. However, The USA has become lazy/greedy, and outsourcing has destroyed the value of our greenbacks (Think about Nike outsourcing goods from Eastern Asia to Sell in US Stores). The USA must produce products that foreigners want to buy. That is the only safe way to increase the value of our dollars. Otherwise, Foreign economies will drop the US Dollar like it's hot.
What's the Worst Case Scenario?
You tell me. Discuss.
Tarik Pierce is the founder of InvestorTrip.com and regularly contributes articles to this website.
While living overseas, he uses PureVPN for a low cost VPN service.
He recommends Bluehost for setting up your own personal and/or business blog.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.