View Full Version : Financial crisis and gas prices....

10-14-2008, 08:48 AM
Gas prices began to go down because of the financial crisis. Now that the DOW Jones is going back up, will gas prices do the same?

10-14-2008, 09:49 AM
This is quite complex. Firstly The Dow, the Footsie etc are going back up for now but won't rise that much compared too how much they dropped. The growth will most likely stabilize too. Mostly because there's been a lot of crap written how corporations are doing bad because they can't get any loans etc. A lot of that is bullshit, most of them are doing bad because of a lack of sales due to a drop in consumer spending which is the result of housing bubble collapsing. So when the serious people realize that, stock markets should stabilize or could drop again because they'll realize that our overlords haven't saved us from a recession or another great depression.

Which brings us to tonights word, 'recession'. What needs to be done is a massive increase in government spending, good old fashioned Keynesian economics. But if they'll in fact opt to cut spending (to get a retarded balanced budget) or get rid of government programs (because they are stupid) then we're heading towards a depression again. Combined with deflation (if you include housing prices to calculate inflation, the US already has deflation I guess), this will bring gas prices down. Except they'll feel as high as they have ever been because most people don't have money anyway.

For the short term I don't see that much of a gas price increase (if any). If you look at oil futures (http://finance.yahoo.com/q/fc?s=CLX08.NYM) they are all basically down. Combine this with a switch to winter gasoline which has a cheaper blending then summer gasoline, which results in cheaper gas prices (so cheaper prices then have nothing to do with having a US election). So short term no. In the long term (6 months to a year)? Let's hope they increase otherwise something is wrong.