The chart below illustrates quite well how a Federal Reserve policy of easy money meant to “bring down unemployment” is hurting most those it intends to help. The black line is the average retail price of gasoline in the United States. As you can see, the price is hovering around $4.00/gallon.
The blue line represents the percentage of consumer spending used to buy gasoline and other energy goods. This percentage has increased dramatically since bottoming out in December of 2008. What this means, is that Americans, with high unemployment and real wages that are shrinking, are spending a larger portion of their consumer spending budget on transportation.
Now take a look at our second chart. You can see that American consumption of gasoline is plummeting. The takeaway here is that Americans are using more of their disposable income on gasoline, and getting less of it in return.
