Gas prices are high because of two reasons:

1) There is an increased demand for oil by China and India.

HOWEVER, more importantly, during the last five years, the USD has declined against all major world currencies by no less than 30%.

See the following links:

Against the Euro:

http://finance.yahoo.com/q/bc?s=EURUSD=X&t=5y

Whoops! Looks like a 50% reduction in relative value!

Against the Canadian Looney. (If it were the American Looney, I'd swear they were trying to describe me!)

http://finance.yahoo.com/q/bc?s=CADUSD=X&t=5y

Whoops! Looks like a 30% reduction in relative value!

Against the British Pound (I've gained a bunch of pounds during the last five years, but not the British kind, and my blood pressure is through the roof! Got to address that issue, shortly.)

http://finance.yahoo.com/q/bc?s=GBPUSD=X&t=5y&l=on&z=m&q=l&c;=

Whoops! Looks like about a 30% loss, there!

What about the Australian dollar? (I love Australian lamb chops. Ate tons of 'em while I was in Beijing, of all places. I wonder what an Australian lamb chop costs, now?)

http://finance.yahoo.com/q/bc?s=AUDUSD=X&t=5y&l=on&z=m&q=l&c;=

Whoops! Looks like the USD is down about 50% against the lamb chop capital of the world!

What about the Swiss Franc? (Some of my own relatives' melted down gold teeth are still in a Swiss vault, somewhere, after they took a shower and had their lungs dry cleaned with a little Zyclon-B...)

http://finance.yahoo.com/q/bc?s=CHFUSD=X&t=5y&l=on&z=m&q=l&c;=

OOOOOHHHH!! Looks like the USD is down about 25%.


See, here's the trouble:

1) When you run up a $9,000,000,000,000 debt, you're gonna screw up your currency,

2) When you have "one-way" open markets, where every country from Mexico to China to India can sell to the United States, but the United States cannot sell back without paying a heavy tax,

3) When you have a war in Iraq based on lies that destroys American credibility,

4) When you have artificially low interest rates to "stimulate" the economy, and

5) When you sell garbage loans that you know are on the verge of default, on the world market,

YOU ARE BOUND TO DESTROY THE VALUE OF YOUR CURRENCY.

When your currency is in the toilet, then all "global" commodities are bound to increase in price. I nearly soiled my pants this past weekend when I paid $5.00 for a pound of "cheap" hamburger. You know, the kind with the maximum fat percentage? (I'd pay more for the high fat hamburger. Remember: fat adds flavor. Thank goodness that the supermarkets haven't figured it out yet.)

Finally, as I was leaving Cal. State Long Beach, today, I saw a gas station charging $4.20 / gallon of premium gas, the only kind my car tolerates. (Mmmmm.... 4.20. Where's my stash when I need it?!?!!!)

Gas prices are definitely headed for $5 / gallon. I thought it would be by the end of the year, but maybe not. I think, perhaps August, instead.

=>PW