Record Low Oil Prices
Yes. You read that correctly. We have record low oil prices right now. Let me explain.
According to the US Department of Energy gasoline sold for .27 cents a gallon (leaded regular) in 1949. Now in 1949, our money was backed by gold and silver. According to coinflation a silver quarter has a melt value of $8.15.
Gasoline at the pump in 1949 was equivalent to $8.80 worth of silver today. At $4.00 per gallon we are paying roughly half the 1949 price. In other words, oil is cheaper in terms of silver. You have the federal reserve to thank for destroying the purchasing power of the US Dollar. Your dollar is losing value. Rapidly.
I have heard that gas prices at the pump had an all-time low of around 17 cents in the depression era. I can’t confirm that. However, if we accept that myth as fact and do the math we find that the 17 cent prices equates to about $5.52 per gallon.
I must conclude, that we are now experiencing a record low price at the pump in terms of real money. So why does it hurt so much? Everything is increasing in price. The dollar is dying and wages are flat. When wages are unable to keep up with the rate of inflation, a larger percentage of your income is devoted to the products you buy.
I am not alone in my opinion. Take a look at what Peter Schiff says: