Another way to consider what has been happening to the prices of gasoline in the USA is to look at the value of the currency we use to purchase it with. Look at the graph below... this shows the value of OUR currency relative to that of countries we trade with. In six years it has dropped from 130 to 95. Of course the price on the pump goes up because it takes more US dollars to buy the same commodity!

Have you seen this graph in your local newspaper? Probably not, unless you follow commodity prices.

This is what is happening to the dollars that you and I have in our bank account, or IRA, or retirement fund. The job of the Federal Reserve is to preserve the value of the nation's currency. What kind of grade would you give the Fed over the past 6 years?

The only way to increase the value of the US$ is to make foreigners more willing to hold the dollar. That means higher interest rates, not the negative interest rate currently forced by the Fed... the short term interest rate on the dollar is less than the rate of inflation!

We see this as consumers of oil because China doesn't export oil to us. The prices of many imports manufactured in low-wage countries has held down the purchase price of many consumer goods. Look for higher prices to US citizens for most imported raw materials, precious metals, and energy. If you have a floating rate mortage on your house, better get it fixed soon, as 6 or 7% will look pretty good in a year or two!

In the meantime, swap your savings into things that don't depend on the value of our currency. Silver and gold should work... maybe even casino chips, but that relies on enough collectors to do the same thing, or they won't have the dollars to buy these in the future [g].