Gas Prices
June 2, 2006
This post would seem to fit best under "useless rantings." It seems that everybody has something to say about gas prices. In the past, I didn't understand how a threat to the U.S. from Venezuela could cause an hike in gas prices. So I asked my father-in-law (financial planner) who explained how gas prices worked. He did a wonderful job and I won't try to explain it here, except to say that it really is a supply and demand issue. Right now the world is demanding a whole lot of oil and so the price goes up. So what's my point?
My point is this – GAS PRICES ARE STILL TOO LOW! I'll illustrate with a simple example. I was riding my bike to school this morning and rode by a large truck. The odd thing was that nobody was in the truck, but it was on and running. I had this truck in my sight for more than a minute and never saw anyone get in it at all. If people have so much money that they can leave their huge trucks running while they are doing whatever, then gas prices aren't high enough. Gas prices need to be high enough that people will start to change their behavior and conserve some gas. As long as people are wasting gas, gas prices are too low.
