Stock Ideas 
Stock Ideas Investors Daily Edge 81 Billion Reasons Why Gas Affects the Economy
Stock Ideas Investors Daily Edge 81 Billion Reasons Why Gas Affects the Economy 
Market Watch
|
By Charles Delvalle I don’t believe that the dollar’s decline will cause a “Dark Age” to strike the heart of America. And I don’t think that we will ever need to carry around gold- or silver-backed currencies again (at least not in the U.S.). |
|
| More... |
Most Popular
Login Form
| 81 Billion Reasons Why Gas Affects the Economy |
| Friday, 23 May 2008 | ||||||||
|
If you don’t mind, I am going to piggyback on Charles Delvalle’s Unplugged article from Tuesday evening. In that article, Charles responded to an email from an IDE reader, Tom, with the subject line, “What has gas got to do with the economy?” I don’t want it to seem like we’re ganging up on Tom, but I just wrote an article about the price of gas and its impact on the economy for our sister publication, Early To Rise. I have a few thoughts I’d like to share. According to the Bureau of Transportation Statistics, there were 135,399,945 licensed automobiles in the United States as of 2003. The owners of these vehicles have less money to spend as the price of gas has soared in the six months. What impact does this have on the economy – and on your investments? Let’s do the math and find out. If the average driver drives 1,000 miles per month and gets 20 miles per gallon, they are using 50 gallons of gas per month. According to the Department of Energy, the national gas price has gone up $1.00 on average since October. That means the average driver has $50 less per month to spend on items other than gas. This may not seem like a huge difference, but let’s take the next step. Multiply the number of cars nationally (135,399,945) by $50 per month. That’s an additional $6,769,997,250 going into our gas tanks each month and not getting used for other items. That is $81 billion on an annual basis. The U.S. is already bordering on a recession (if we’re not in one already) and now gas is taking an additional $6.7 billion out of the overall economy each month. How long do you think gas prices can stay this high without the demand falling significantly? And how long do you think the consumer can take these gas prices without having to seriously cut back on their expenditures? You bet your ass the price of gas affects the economy. Good luck and good trading, Rick
P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
This investment news is brought to you by Investor's Daily Edge. Investor's Daily Edge is a free daily investment newsletter that is delivered by email before the market opens. It's published by Fourth Avenue Financial, a subsidiary of Early To Rise (an affiliate company of Agora Publishing). In each weekday issue you'll receive practical strategies for protecting your portfolio and multiplying your money. You'll also learn about undiscovered opportunities in emerging sectors and markets, deeply discounted stocks, recommendations for bonds, cash, commodity and real estate investing, and top ETFs. To view archives or subscribe, visit Investor's Daily Edge .
|
||||||||
| < Prev | Next > |
|---|
