11 October 2008

I don't get this at all

I thought it odd that, through all this economic turmoil, that the price of gas kept dropping. Odder yet that no one mentioned it. I figured I was just missing that conversation as I don't read that much business news and I don't watch any tv news on purpose. Yesterday, in a small tucked away article in the local rag, they noted that the price was dropping because demand for gas was down.

Huh?

I am anything but an economic expert. I enjoy math but consider accounting to be some sort of weird magic that allows you to spend your money while still keeping it. I wrote a term paper about the stock market in the 8th grade in an effort to understand it better and came away with the impression that it was some weird game because the value of a stock was what someone would pay for it.

In that, if nothing else, I was right. What I'm trying to build up to is my general lack of knowledge on the subject so, if I say something incredibly stupid next, you'll know why.

How is the demand for gas down? It must be on some grandiose level, like for long haul truckers or something because I don't see that people have stopped driving in large numbers. Is it some airplane related thing where more crude is available to make regular gas because airlines are cutting out flights? Most people still have to go to and from work everyday and are still fueling up regularly to do so. Yet, in the last month or so, the price of a gallon of gas has dropped about a dollar. I saw stations in Milwaukee listing $2.99 yesterday, which did fill me with a certain glee.

In my innocence, I'd think that lowered gas prices would help stimulate things a bit. You know, paid less for gas this month and can afford something else I wouldn't otherwise have bought. More items are shipped because gas prices are down and things are selling. Production increases because things are selling, etc.

As noted, I know nothing. When you see the price of gas climb for 12 hours at a gas station because a hurricane 'might' impact production and then returns to lower than the previous price because the damage wasn't as bad as expected, it becomes tricky to trust any reasonings provided.

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