Get your gas now…

Panic causes price rises. Period.

The basics of supply and demand dictate that when there is a shortage or percieved shortage of supply then demand rises. Likewise, when demand rises so does price. If a hurricane, in this case Ike, causes damage to oil refineries we will likely see a rise in prices. This is natural and expected as it creates scarcity.

Unfortunately, what is also natural and expected is that people will speculate as to the effects of events, lending a pesemistic weight to the equation. This negative slant causes people to try to “beat the rush”, causing a spike in demand. This spike in demand causes a shortage in supply, thus hiking up prices.

STOP SPECULATING THAT HURRICANES WILL CAUSE SHORTAGES! You are causing the price to rise for everyone. If you are really worried about such things stock up over time and/or well in advance.

This is my rant for the month.

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Jason McDonald

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