Why is gas so expensive? Blame the weak dollar, not speculators. 

The Congressional Joint Economic Committee has released a study showing that the dollar's current weakness relative to 2008 has added 56 cents to the cost of each gallon of gasoline, and $17 to the cost of each barrel of oil: 

Rep. [Kevin] Brady, [R-Tex.], the top House Republican on the congressional Joint Economic Committee, released a study that looked at the economic costs to average Americans of the massive infusion of dollars into the U.S. economy by the Fed designed to stimulate the economy and stave of a national economic catastrophe as the U.S. financial system teetered on the brink of collapse.

“Americans are paying a steep price at the pump as a result of the weak dollar policies pursued by this administration and the Federal Reserve”, said Brady.

The study, entitled The Price of Oil and the Value of the Dollar, states that the value of the U.S. dollar has declined by 14 percent since the Fed began its program formally known as “quantitative easing” (also called “QE1?) in November of 2008, as the financial system neared meltdown.

By pumping out dollars to stave of an impending disaster, the Fed effectively devalued the U.S. currency. With oil an international commodity that trades in U.S. dollars, the declining value of the dollar has added $17.04 per barrel to the price of Brent Crude oil, the study found.

This is pretty obvious stuff. Although not an airtight exoneration of evile speculators nor big, evil oil companies, it should also give rational people pause every time they hear President Obama blame some new bogeyman for a problem that is part and parcel of his government's unspoken weak dollar policy.

 

About The Author

David Freddoso

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David Freddoso came to the Washington Examiner in June 2009, after serving for nearly two years as a Capitol Hill-based staff reporter for National Review Online. Before writing his New York Times bestselling book, The Case Against Barack Obama, he spent three years assisting Robert Novak, the legendary Washington... more
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