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Tuesday, January 6, 2015

Oil Prices A Droppin' & We Keep A Smilin'

Yesterday the Dow dropped 330 pts -- and we say Good (really wish it was 3,330 pts)

And it was due to oil dropping to around $50.80 a barrel for oil which is the lowest its been since early 2009

Also we say 'Good'

Pretty much everything in a legitimate economy (excluding illegal activities like selling drugs) is inter-linked..
And while its quite fashionable for the 1%, the Financiers and the puppet media to try to show how low oil prices are bad, we here at A&G will give just a small sampling of how its actually Wonderful for all

If fact, had oil prices stayed at $50-$60 for the last 6-7 years instead of its speculative elevation to $110/barrel and $4+ /gallon for gas, we argue that the nation may have well experienced a Genuine, sustainable recovery  and may even in fact sincerely say we were 'Recovered'

And it wouldn't have involved massive Fed injections into the market and all these illusory tactics to make people think there was one
We did a simple math calculation where a person back in 2009 fills up 15 gallons at $2.15/gal weekly for a year and the total comes out to $1,677 in gasoline spent in 52 weeks.

Then we figured a gradual increase of 35 cents per 52 week cycle each year from 2010-2014 to where it was around last summer..

2010:  15gal x $2.55 x 52wks =  $1,989
2011:  15gal x $2.90 x 52wks =  $2,262
2012:  15gal x $3.25 x 52wks =  $2,535
2013:  15gal x $3.60 x 52wks =  $2,808
2014:  15gal x $3.95 x 52wks =  $3,081
Add those 5 totals to equal $12,675 each person has spent on average for gasoline in the last 5 years..

Now subtract that from $8,385 which is the 2009 cost for those 5 years

$12,675 - $8,385 equals $4,290 ($858 yearly average) every driver spent in the last 5 years because of Wall Street speculation and other behind the scenes tricks artificially pushing gas up to $4 and up..

And we were quite conservative in our example..

Now imagine 100 million American drivers x $4,290
That equals $429 billion dollars taken out of the US economy.

What exactly do we mean?

When you fill your tank, the $$ for the most part doesn't stay in America to circulate the local or national economy..   Instead it goes to Venezuela (Citgo), or Russia (Lukoil) or Saudi Arabia or Nigeria, etc...

Most US crude actually is sold abroad..  Larger profits..
So how does lower oil i.e. gas prices help everyone besides the instant savings at time of pump purchase?

For one thing, the lower the price of gas, the more likely people are to buy larger vehicles that are perhaps less fuel efficient like large SUVs and trucks

This stimulates the local economies of every big city and small town that has car dealerships..

It means more sales and county tax revenue and most civic charitable and cultural endeavors are sponsored by local car dealerships so when they make money, their communities feel some indirect benefit
Also, every car bought, especially a new vehicle means a new car loan which stimulates the financial sector and gives opportunity for people with perhaps not-so-strong credit history to build it up

And when cars are sold, there needs to be new inventory to fill those empty parking spaces and that means fresh new orders to the factory which means more workers building new product from new materials..

You see how many people are positively affected by low gas prices across the nation in just this short example?

Then there's how many millions of Americans who use natural gas to heat their homes in the winter and the price adjustment they Should be receiving.
~ Just letting you know I am getting Very Sleepy...

And then there's the example of the financial benefit to all if/when businesses ultimately lower the increased transportation costs which have been passed on to consumers the past 5+ years..

This ultimately means everything is lower-- food, clothing, electronics..

Fifty cents here..  A dollar there..   It all adds up..

Going to the supermarket the other day we noticed milk dropped 8 cents for a gallon.  If a person drinks a gallon a week, that is ultimately a savings of $4.16
Not a big deal?  Fine..  Next time you go to a store, give the cashier $4.16 more than you should and then shrug and go 'No big thing!' then walk away..

Pennies saved are pennies earned..

They are used to pay down debts, put into savings or investment or to buy new product or services which re-circulate the local and national economy.

This is how things are Supposed to be, but its been such a damned long time since we've seen firsthand some kind of economic benefit for All, and so conditioned to rely on the Fed and Wall St manipulation, that its still a shock to some

Anyone who tells you low gas and oil prices are bad, just look at them as the idiots they are.