What flabbergasts me, however, is that very few pundits bother to look at actual history to see if rising prices have ever had a negative effect on the economy. It seems most would like to speculate, postulate, and go with the “gut feel” rather than do the sensible thing and look at the data.
In that vein, then, I want you to look at the chart below. I overlaid the average U.S. pump price (blue) with the GDP (green) and S&P 500 (red). You can see that despite ferocious peaks and valleys in the price per gallon, both the GDP and S&P have trudged ever higher.
Of course, history is no guarantee of the future, but it is instructive. This exercise should be helpful from a few perspectives. One, any pundit who voices an opinion without facts to back it up is basically relying on his or her instincts. And those instincts are no better or worse than yours.
Second, when formulating your own opinion, spend a few minutes to see if it's grounded in fact. Those facts are out there and are available on a variety of sites, including the one I used for this chart, economagic.com.
Finally, it takes a lot to stop the upward bias of both the market and our economy. So, think twice before you believe the reason du jour will slow us down.
This weekend our Business Block has much more with "The Chartman." Tune in Saturday 10am - noon ET.
Gary B. Smith is a managing partner at Exemplar Capital and a regular commentator on "Bulls & Bears."
Gary B. Smith joined FOX News Channel in 1999 and is currently a regular commentator on "Bulls & Bears," including his own segment called, "The Chartman."