Chart: Gasoline price relative to gold
Gas priced in gold
Here's a little something for those of you who think that gasoline is expensive. The price denominated in dollars may be rising, but in historical terms, it's still a bargain for those of us in the U.S. of A.
This chart is inspired by The Silicon Graybeard's post on OPEC and gas prices. Among other things, The Gray One writes about the price of gasoline compared to gold prices, which got me to thinking... what kind of chart would we get if we calculate the average price of gasoline per gallon, in ounces of gold (using the average gasoline and gold price for the year)?
Some examples:
- In 1919, with gold at $20.67 an ounce, and gasoline at $0.255 per gallon, it would have cost 0.01232 oz. of gold to buy a gallon of gas.
- In 1942, gold was $35/oz. and gasoline at $0.204/gallon, and it would have cost you 0.00584 oz. of gold to buy a gallon of gas.
- In 1970, with gold at $36.07/oz., gasoline at $0.357/gallon, you would have coughed up 0.00989 oz. of gold to buy a gallon.
- Today, with gold at $1,440/oz., and gasoline at $3.154 (man, I don't know where you can get it for that price, it's about $3.70 a gallon in northern California), you need only 0.00219 oz. of gold to buy a gallon of go-juice.
This may not be all that interesting, except as a reminder that gold isn't going up, paper money's going down. (We might say the same thing about commodities, which I expect are suffering from relatively weak demand in this economy -- but there's far less demand for U.S. Dollars relative to the supply, and people aren't so confident in the U.S. economy's near-future prospects...)
Now, having said all that, gas prices may be causing you pains, because you may be falling behind the inflation curve–I understand your frustration, I agree that it sucks, but it's misguided to blame the oil companies for that. You can thank your genius 'representatives' in Washington, who are doing nothing to increase oil availability, and, along with the Federal Reserve are doing just about everything in their power to destroy the value of the Federal Reserve Notes you received for your labor.
Addendum
Here's a cool site, Priced In Gold, where you can see charts for all sorts of things priced in gold.
All paper currencies are dying …
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Comments
#1 gas costs
Isn't it also a fact that the taxes on a gallon of gasoline are five or six times the profit the gas companies make per gallon?
#2 Good point
That's very good point -- since gas taxes are almost always ratcheted up, that makes the actual price of the gasoline even lower. Not that it makes it any easier for average Joes and Josephines to afford.
It seems like every time there's a spike in gas prices, when the price starts to go down, the local, state, and federal governments all seem to want to increase the taxes to keep the price up, for our own good, of course.
I'll see if I can factor that into the next version of the chart... now all I need is a good source of historical gasoline tax data...
#3 Interesting chart! In the
Interesting chart! In the early days, refining gasoline had to be "high tech" and more expensive to do than now - after a century of practice. All technology tends to get cheaper as you get better at it. From that standpoint, I'd expect prices to come down compared to a standard, and that's what you show.
And it's true that oil company profits tend to be tiny. I've heard 6% quoted as typical, so when you hear the anti-oil people saying that Exxon made the biggest profit in the history of the world, it just means they're a big, big company. If Apple or Microsoft had Exxon's sales, and their (Apple's or Microsoft's) usual ~ 20% profit margin, they'd really be raking in the bucks! It's why I've never put money into oil company stocks.
#4 The Timeless Old Blame Game
All that being said about an Oz. of gold vs. galon of gas...fact or fiction?...and so what? How does this chart supposed to help the problem at hand? And if it could help I don't know who to trust or what to believe. I am but a simple man just trying to put food on the table and keep the lights on and I make my meger paycheck driving a dump truck...needless to say fuel prices are killing theTrucking Industry and when that domino falls...well that IS scary to imagin. I'm going out on a limb here to say I am speaking for everyone. Weather it be "Big Oil" or "Big Government" or "The Big Tax Man", "We The People" do not fill any better about having to work 3 days a week just so we can buy enough gas to drive to work for 5 days. The blame game is but a deversion to keep us occupied inside the box while the rulemakers of the game are on the outside of the box laughing and putting our money in thier pockets! The USA is a great country but I fear not for long. WAKE UP AMERICA, please wake up.
#5 No, the chart doesn't help a bit if fuel prices are hurting you
The chart doesn't help anything. Just trying to point out that the oil companies are bit players in the game being played out right now.
The only things that will help reduce the "dollar cost" of fuel, as far as I can see:
Believe me, the fuel price increases are hurting many people, including yours truly... the only direct power I have is to stay off the roads as much as possible, which doesn't help much, and I know that you and many others can't do that. And many will have to pass their increased costs on to the consumer through price increases.
I can't help thinking we're living in the Carter 2.0 era–complete with rising prices, stagnant wages, and high interest rates (coming soon, I think).
I think Americans are waking up, though I fear it's too little too late. It sure feels like we're in for a rough ride.
I hope you'll be skeptical of the quick fixes the politicians and policymakers will offer you–if they don't stabilize the value of the dollar first, restoring confidence in our currency, prices will continue rising relative to the dollar.
#6 I agree with most of what you
I agree with most of what you have said , and your telling your age if this reminds you of the "Carter era" it does me too, but without "price wars" that's something that might help except instead of playing bumper cars at the gas stations people today would be shooting each other but total chaos works in certain situations. I just needed to vent a little. Thanks.
#7 Oh, yeah, I'm heading into Old Fartdom...
CarterFord was trying to beat inflation by passing out W.I.N. buttons*.Honestly I don't know what's coming: inflation, deflation, stagnation, or just plain damnation... but it's starting to look like things are moving from bad to worse...
Vent all you want, that's what we're here for. Dunno if you noticed, but this entire site's dedicated to venting in one form or another. Wouldn't have it any other way.
*For those kiddies in the audience, W.I.N. Buttons were a cool way to show you were behind President
Carter'sFord's war on inflation. Like many of our 'wars' of late, it was a fruitless exercise; W.I.N. stood for 'Whip Inflation Now", and it was about as rational as wishing your way to wealth–monetary policy drove inflation then as it does now, and if the president wanted to "Whip Inflation" he could have pressured the Fed to stop the printing presses. President Carter may as well have sought release of the Iranian Embassy hostages by distributing "F.H.N." buttons to Americans, meaning "Free the Hostages Now!"Edit: My bad, it was Ford who started the W.I.N. campaign. Carter's approaches were even less effective.
#8 Old Fart...
HAHAHAHAHA , that whole post was too funny but true. I just hit 50 myself and cant believe I lived long enough to care enough to have adult conversations like this. OK God take me now.
#9 Jimmy Carter was his own parody...
But this skit with Dan Ackroyd on SNL had me in stitches at the time:
Welcome to the Cynical Old Farts' Rest Home!
#10 gold, oil and fiat
Let me tell you something about the price of oil. Gas in the USA is super cheap compared to the rest of the world. Try going to Canada or Europe and then tell me it is expensive. In Europe it is $6-7 + a gallon. The gold price is rising because that moron Bernanke is printing like a drunken sailor. The price of gold is a function of how much dollars Bernanke decides to prints. Even thought so much has already been printed I am surprised the price of gas still so low. This is what happens when you have fiat currency, the people that get hit the most and mom and pop and the working man.
#11 What is the source for this
What is the source for this data?
I'm just wondering, not saying you're lying.