$0.50 of gas price, brought to you by the decline of the $

deejayoh

Here's an interesting article on the long-view of the dollar from Barrons by way of The Big Picture blog.

The Value of the Dollar

It mentions that there has been a 30% decline of the dollar against other currencies since 2002 (which by the way, don't include the Yen or the Yuan, since these have been effectively pegged to the $ by their CBs)

So the next time you fill up and see $3.50 or more per gallon, think about this.

- Half the cost of that gas is for the oil from which it is made - the price of that oil is pretty much set by OPEC these days - the $1.75 cost that is the oil is $1.22 in 2002 dollars - so more than $0.50 of the increase in the price can be attributed to dollar deflation

So in my case, it's costing me about $7-8 everytime I fill up to support our monetary policy. But at least these low interest rates are keeping the market high.

Phew.