Thursday, November 4, 2010

Headline: "Not-so-happy holidays ahead at the gas pump"

File this under "unintended consequences"

There is plenty of oil and gasoline on hand, and pump prices usually fall this time of year. So what's causing the run-up? Most analysts point to the Federal Reserve's $600 billion economic stimulus effort.
The national average for a gallon of unleaded gasoline was $2.806 Thursday, according to AAA, Wright Express and Oil Price Information Service. That's about 7 cents more than a month ago and 12 cents above a year ago. It will probably keep rising. Some analysts think the price could be a nickel to a dime more by Thanksgiving.
Oops! The Federal Reserve tries to control an extremely complex (literally impossible to model) system by pushing really hard on one variable.

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