Comments on: Economic Problems – Less Pain at the Pump, More Pain for you Everywhere Else

By: matt

matt — Wed, 17 Sep 2008 13:20:47 +0000

Thanks Brian, I’d really like to get a deeper explanation for all of this. I’m interested in learning more about it.

By: Brian Carr

Brian Carr — Tue, 16 Sep 2008 21:38:55 +0000

You’re all right – I did a poor job of articulating my point. I’ll post some sort of update better explaining myself.

By: matt

matt — Tue, 16 Sep 2008 20:42:31 +0000

Okay, but why?

How does a weakening economy relate to falling gas prices?

Don’t lower gas prices mean the dollar is getting strong vs. other worldwide currencies?

Isn’t a strong dollar good for our economy? Wouldn’t a strengthening dollar attract investors back into domestic markets? And, I thought that would also attract foreign investors as well.

By: Wow..

Wow.. — Tue, 16 Sep 2008 20:23:54 +0000

It seems you are basing your predictions on only one cause of gas prices changing. Gas prices did not go up solely because of demand. They went up for a number of reasons:

1. Demand for summer driving
2. Inflation of US Dollar
3. OPEC Overpricing
4. Speculation
5. Recent hurricane issues affecting refineries

Now the decrease in gas prices is going to be caused by quite a few things including the following:

1. Less demand due to summer ending
2. OPEC scaling back price hikes because of offshore drilling talk
3. Self correction on price because of over speculation
4. Restoration of refineries and oil platforms

So I would say this article is poorly explained initially as well as poorly thought out. Not sure how this made it so far on digg…

By: Kyle Varner

Kyle Varner — Tue, 16 Sep 2008 19:27:42 +0000

It seems to me that a weakening US economy would drive gas prices up, not down. While we would see a marginal decline in demand, we would also see a much larger decline in the value of the dollar. If the dollar drops, oil prices go up.

By: Dean Striker

Dean Striker — Tue, 16 Sep 2008 15:58:30 +0000

Nicely done, Brian.
You’ll find cause, effect and solutions on my website.

By: Brian Carr

Brian Carr — Tue, 16 Sep 2008 11:19:04 +0000

I’m not saying lower prices would drive the economy down, rather significantly lower prices are a symptom of an economy that has taken a turn for the worse.

Let’s take this step by step:

1) Oil and gas prices (Ike withstanding) are falling

2) Much of the reason behind the decrease in price of oil and gas is due to falling demand and a weak American economy.

3) The more the economy weakens, the more demand for gasoline and oil will fall

4) Assuming the supply of oil and gasoline stays the same, prices will continue to fall if demand continues to fall

5) The further prices fall, the further demand has fallen

6) In going back to point 2, the further demand falls, the weaker the American economy has become

Sorry I didn’t get this point across.

By: Lucas

Lucas — Tue, 16 Sep 2008 06:23:48 +0000

You don’t really make it clear as to why the drop in gas prices would continue to drive the economy down. From what little i understand this would only help the economy. Allowing people to spend their money on other consumer goods. Which, in effect, would help the economy.

Though maybe I am missing something…