Is $4 Gas Capping Bernanke's Dow-20k Dreams?

Tyler Durden's picture

A funny thing happened on the way to Bernanke's wealth-creation strategy program. The unintended consequence of flooding the world with USDs, as we have pounded the table again and again on, has been 'spillover' into hard assets (or assets with relatively fixed supplies). To wit, oil prices are surging once again. Critically, as the chart below shows, each time this energy price hangover has trickled down to the consumer via $4 gas prices, it has marked a turning point in the US equity market. Of course, this time is different, but nevertheless one has to wonder how stock prices rise by any measurable amount with stagnant wage growth and price inflation in everything we buy and use (and now even the hedonically-tamped PPI is starting to show signs of instability).

S&P 500 'tops' vs $4 Gas Prices...


Chart: Bloomberg

(h/t Brad @ NewEdge)

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LawsofPhysics's picture

No, more likely that $4+ diesel is.

GetZeeGold's picture



Yeah....but only libertarians use no problem.


Precious's picture

Socrates once said, "Whenever I fart it stinks.  Therefore stink must come from farts."

BaBaBouy's picture

Don't Complain ..

In CDA It's Almost C$6. Gas ...

And C$ is Higher to boot...

Henry Chinaski's picture

Gas (fuel, petrol, oil) can't be counterfeited and is an (the?) economic truth teller of our times.

I think I need to buy a gun's picture

There is now an answer to 4 dollars gas........CHEVY VOLT>>>>>>>>

Citxmech's picture

Because no fossil fuels are used producing the electricity for that POS, right?

goldm3mb3r's picture

In the UK is is over $11 so it is all relative. We don't complain because the tax goes to our overlords to buy us good stuff.

ParkAveFlasher's picture

UK is relatively small and you ride harry potter buses to work in small shoppes. Just kidding.  But consumption is lower.

The average non-urban USian spends an hour and half in the car every day. 

Abitdodgie's picture

In the UK your cars get about an average of 60mpg but you pay $11 a gal , in the US we pay say $4.00 a gal but the cars only get about an average of 20mpg, so it is about the same fucking we both get ( high milage cars are banned in the US by the EPA.)

insanelysane's picture

Gold at $1,700 or Oil at $110 is a global price.  The actual price of gasoline differs a little bit on refining costs and the major portion on taxes.  And the Europeans blow through all of their tax money just like the US govt does.

DrSandman's picture

Dude -- put down the crack pipe.  60 miles per IMPERIAL gallon... on a made up Euro-weenie test cycle with all the engine accessories disconnected and out fo the car.

And the EPA doesn't ban small cars here.  The safety overlords (DOT) do insisting on a minimum crashworthiness.

Citxmech's picture

So how come it takes an act of God and $5k+ worth of anti-smog crap  to actually get a diesel-powered car on the market over here these days?

mirac's picture

Winter in Venezuela...5 cents a litre and 18 cents a US gallon.

Flakmeister's picture

Ain't socialism great.....

aerojet's picture

$6/gal in the US would cause some major upheaval--a lot of people will just walk away from their jobs because they won't be making any money anyways.  I would definitely ask my employer if I could start working from home 1-2 days a week and then also try to find a 40mpg vehicle.

LouisDega's picture

Confucius says, " One who scratches ass, Gets Sushi finger"

malikai's picture

You guys got it all wrong! High oil prices are transitory and deflationary. Just ask any qualified Keynesian talking head. They'll tell you.

TruthInSunshine's picture



"The ONLY reason gasoline and diesel prices are a cent above $1.99 per gallon at the retail level is because of massive inefficiencies in the discovery, extraction, refining, distribution & franchise operations of oil corporations, refiners, distributors and fuel retailers"

"Trillions upon trillions in fiat money printing, via the purchase of U.S. Treasuries by The Federal Reserve in secondary markets (that would otherwise carry a much higher yield lest there be a dearth of purchasers), with The Federal Reserve acting as enabler of Congress & the White House, and at the very strong urging of the best friends forever of the New York Branch of the Federal Reserve, in no way, manner, shape or form has any influence over the price of energy (or food, or the higher "everything else" prices that consumers are seeing rise with each passing day)."


-- Ben S. Bernanke

   September 13, 2012

poor fella's picture

Queue up the maintenance windows.

If that doesn't work, ignore a pressure guage or two and poof, refinery bomb placed by Iranian-sponsored Al Keeeda..

aint no fortunate son's picture

It wouldn't matter what gas prices are anyway. High gas prices create economic affects. Fortunately, economic conditions are NOT arbiters of equity prices - as we all know, hallelujah!. The algos deciding the level of the SPX on any given day can afford $50 gas without blinking - they'll just fuel up with Cristal.

JPM Hater001's picture

I know this may seem crazy but do you really want to know what the only solution to high energy prices is?

High energy prices.

malikai's picture

Wait. Just to be sure I get you.. Are you talking about a healthy, functioning market or what we have today?

TruthInSunshine's picture

But then prices might decline, and then The Bernank will fret (i.e. exaggerate incredibly wildly and disingenuously) about the 'risks' of deflation, prompting him to quadruple down on fiat printing (even though massive inflation in food & energy prices do not comprise any component of the Fed's headline inflation number, being "transitory," "volatile," and such).

Urban Redneck's picture

libertarians, eco-freaks, oligarchs, and armies (strange bedfellows in the diesel community)

The trend is your friend's picture

It's over 4 in parts of NJ which is one of the few things we pay less for, i can't imagine where prices are in other states.  It's gonna be another wonderful Christmas Season.  Never count out the US consumer.  He will always find a way to piss away money on junk during the spending season

mirac's picture gas prices US and Canada

hedgeless_horseman's picture



Correlation, bitchezzz!

gggunchi's picture

Bring the $8 gas bitchez

slaughterer's picture

Tyler, are you trying to get us to position short into FOMC today?  Is that it?  /sarc

Lost Wages's picture

Don't worry, the primary dealers can just wash-trade this away.

Dollar Bill Hiccup's picture

I want to ride my bicycle ...

Deep79's picture

Can't the FED just print Gas?



GetZeeGold's picture



Good ideas like that are going to get you sent to the head of the class.


mrdenis's picture

I'll leave that to Toco bell 

jmeyer's picture

The Fed's charter only allows it to PASS GAS, not print it.

The Axe's picture

4 dollar gas is a HUGE tax on the low to low-middle working person.....But does Ben give a rats ass??? I doubt it!  You got some clown taking the metro North into midtown teling the world $5 is the new normal!!!!   lol

ejmoosa's picture

It's a huge psychological tax on everyone that fills up a tank.

Think I am going to head out at lunch for a bite when the gas consumed is gonna raise the price of the meal by 50%?  I think not.

insanelysane's picture

Wife bought baloney for lunches yesterday.  We haven't had that for lunch since we got married and bought our first house 14 years ago.

johnQpublic's picture


we hadnt eaten ramen since the early nineties and now its a staple food

hedgeless_horseman's picture



We haven't had food prices increase much since we bought our farm 10 years ago.  Milk, beef, cheese, eggs, yogurt, chicken, ice cream, butter, rabbit, fruit preserves, herbs, and fresh vegetables all still cost about the same amount of money...essentially nothing.

Thank you Princess Buttercup and The Dairy Queen!

RSloane's picture

You're probably the smartest of all of us.

elderstew's picture

Nice, you got it! Assuming you buy no feed, the only variable input costs would be property taxes and utiltity rate increases. Take a tip from the  livestock too.  It all floats on OK, until one day it doesn't.


goldfish1's picture

Two things:

I like fried beef baloney. Deer baloney is fantastic. Sometimes I put some cheddar cheese on it.

Good point about the cost of gas and going out to lunch or anywhere else for that matter.

aerojet's picture

I'm actually no longer buying lunch meat at all.  It's good right?  Austerity is forcing Americans to look at vegetarianism in a whole new light.  What I want to know is, who the fuck is buying those 11oz. bags of potato chips at $4?  Nobody, that's who.

RSloane's picture

Which segment of the population has the highest percentage of people with morbid obesity, high blood pressure, type 2 diabetes, high cholesterol, and incredibly fat children? Those are the people still buying potato chips.