Wednesday, October 22, 2008

Something Isn't Right

Basic economic principles are not being followed.
The gas prices are falling, yet the food prices have not.
The two are correlated.

The gas prices are falling, but why are they?
There is nothing going on that would make them fall.
There is the same amount of demand. Gas, like milk is inelastic demand item. Meaning, it is like milk. People will buy milk, no matter how much it is, because they need it. So the price variation does not make sense. In Fact with Ike coming and going, it should cause the price to increase, versus decrease. The economists even said that would happen.

Something isn't right. I will leave it at that.

1 comment:

  1. Four years ago exactly the same thing happened, remember?
    That give you a hint?

    ReplyDelete