Many of us aren’t old enough to remember Gasoline at 20 cents a gallon. I can remember gas during the 1960′s at 29.9 cents a gallon. The last time that gasoline averaged 20 cents a gallon was in 1942. That was during WWII ! But if you know us here at InflationData.com you probably know that we usually talk in inflation adjusted prices. So adjusting for inflation, the price of gas in 1942 would have been $2.78 if you are paying in January 2012 dollars. But that is still a long way away from the average price of Gas in 2011 of $3.48.
We track the inflation adjusted price of gasoline based on the annual average price using the Consumer Price Index (CPI) generated by the U.S. Bureau of Labor Statistics and a chart is always available from the menu bar above under Inflation Charts and Data / Inflation Adjusted Prices.
But this article isn’t about inflation adjusted prices using some artificially created index, and it isn’t about prices of gasoline during WWII. How would you like to buy a gallon of gasoline for 20 cents today? Yes, two thin dimes! Well, I recently I read an interesting article called Why Gas Prices Are actually Falling and in it was this picture:
So there you have it a store that is currently selling Gasoline for 20 cents a gallon. And if you look at it closely you will find that he is actually making “excessive” profits as the monetarists might say. You see, today as I write this, Silver is trading for about $35.51 per ounce. A silver dime contains 0.0724 ounces of silver. So at current prices a Silver Dime is worth $35.51 x 0.0724 or about $2.57 so the guy who is selling gas for two silver dimes is actually getting $5.14 per gallon of gas!
So that leads to one of two conclusions [Read more...]