Commentary
Soaring oil prices are not only a serious threat to travelers, crazy high fuel prices seriously disrupt businesses, the economy. They even promote wars.
There are a number of reasons for the current surge in oil prices. The Federal Reserve’s monetary policy is primarily responsible for the overall rise in all prices. Without the extreme flood of money created by the Fed, there could be no sustained increase in inflation.
However, while conventional inflation measures are up 6 percent to 8 percent over the past year, oil prices are up 60 percent from a year ago. The surge in oil and other energy prices relative to other prices represents a unique problem for the economy, one that compounds the problems from other policy mistakes. Soaring energy prices have a pervasive impact on the economy; by raising the cost of transportation, they affect the cost of almost everything we buy….
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