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$5 gas isn't going to have any dramatic effect on the average person...they'll just cut back in other spending areas because we all know how married to automobiles Americans are.
The last time around I still saw plenty of gas guzzlers driving around, and certainly no fewer cars on the roads, despite all the doom and gloom ranting.
If the speculators let oil hover around that $100+/bbl price for long enough, it might incite some riots and bad behavior as the longer term effects play out...but will the tricksters let that happen?
This argument above is hugely flawed, on several levels.
First, the typical American is in much worse shape financially than he or she was "the last time around," thus any increase in living costs, including higher fuel costs, is going to hurt, and hurt plenty.
Second, as I have stated numerous times before, the real pain for Americans comes not at the gas pump, as unpleasant as that is, but in the cost of every other flippin' thing that they buy that has to be transported using that now much more expensive fuel.
Third, once again we have people blaming "somebody"--pick your villain: speculators, oil companies, etc.--for escalating oil prices. The real reasons are this:
1. We are rapidly exhausting the cheap-to-produce reserves, both here and abroad. Any "new" oil that is produced is going to cost much more, and that cost will be passed on to the consumer.
2. Worldwide petroleum demand continues to increase in the face of declining cheap reserves.
3. Some of the most extensive and easily produced petroleum reserves are located in extremely politically unstable places. That instability negatively impacts both the ability to conduct normal commerce in those areas, and even can diminish the availability of the technical expertise necessary to enable production. Also, a lot of those places really don't like the United States at all, so we in this country have that problem to contend with when dealing with those countries, too.
4. Thanks to our own fiscal mismanagement, both individually and collectively in the United States, we are debasing our own currency, which will make all of our oil imports just that much more expensive for us.
5. Finally, with our continued and unwavering commitment to our automobile-centric and suburban-dominated lifestyle, we have locked ourselves into having to pay whatever price it takes--no matter how devastating to the rest of our economy or to our national security--to keep our unsustainable lifestyle running. I equate this behavior to a drug addict starving himself in order to keep paying for his drug habit--pretty much with the same devastating personal results.
Quite bluntly, we couldn't have figured out any more ****ed up way to destroy this country's long-term future than what we are doing right now.
This argument above is hugely flawed, on several levels.
First, the typical American is in much worse shape financially than he or she was "the last time around," thus any increase in living costs, including higher fuel costs, is going to hurt, and hurt plenty.
Second, as I have stated numerous times before, the real pain for Americans comes not at the gas pump, as unpleasant as that is, but in the cost of every other flippin' thing that they buy that has to be transported using that now much more expensive fuel.
Third, once again we have people blaming "somebody"--pick your villain: speculators, oil companies, etc.--for escalating oil prices. The real reasons are this:
1. We are rapidly exhausting the cheap-to-produce reserves, both here and abroad. Any "new" oil that is produced is going to cost much more, and that cost will be passed on to the consumer.
2. Worldwide petroleum demand continues to increase in the face of declining cheap reserves.
3. Some of the most extensive and easily produced petroleum reserves are located in extremely politically unstable places. That instability negatively impacts both the ability to conduct normal commerce in those areas, and even can diminish the availability of the technical expertise necessary to enable production. Also, a lot of those places really don't like the United States at all, so we in this country have that problem to contend with when dealing with those countries, too.
4. Thanks to our own fiscal mismanagement, both individually and collectively in the United States, we are debasing our own currency, which will make all of our oil imports just that much more expensive for us.
5. Finally, with our continued and unwavering commitment to our automobile-centric and suburban-dominated lifestyle, we have locked ourselves into having to pay whatever price it takes--no matter how devastating to the rest of our economy or to our national security--to keep our unsustainable lifestyle running. I equate this behavior to a drug addict starving himself in order to keep paying for his drug habit--pretty much with the same devastating personal results.
Quite bluntly, we couldn't have figured out any more ****ed up way to destroy this country's long-term future than what we are doing right now.
Agree. And the second point is going to ~really~ hurt now, just as people are starting to tiptoe back into the stores again.
Glad you think oil will tumble. When has it done so in the past?
With election year coming up, we will probably see gas/oil prices flatten out a while like they did in the last election year. Then they once again start to go up.
Yesterday my area stations were charging $3.09.
24 hours later: $3.19
I guarantee you, it's gonna cool off. Or there will be civil war in every country.
But of course, spam lovers like Tighwad love keeping the board at the edge of its seat. Enjoying retirement I guess
This is simply like the Hurricane season a couple years ago when oil supply was disrupted. A ton of investors are buying into oil stocks right now, they're gonna lose big time. Next week I'm actually planning to short some oil tickers, based on the situation.
And before the pumpers hit me with a brick, I have shorted Exxon twice and have made some nice profits, very equal to what some longs refer to as "dividends"
5 bucks a gallon wouldn't be too bad for me...I burn about 9 gallons a week getting to and from work....so I'd be spending $45 instead of $27...no biggie.
Where I'm a hurting puppy is my boat....she holds 1200 gallons of diesel....and I can burn that in 3-4 weekends! $6000 visits to the fuel pier will get old fast. I'll just have to cruise less and skip the vacation cruise to Maine....or go very other year. Then there's the Ocean City charter fishing boat I co-own. We go 100+ miles out looking for the big 'uns for our customers. Takes a lotta diesel to do that, and if it gets too high, folks just won't be able to afford a day of deep-sea fishing.
This argument above is hugely flawed, on several levels.
The Center for Policy Analysis at the University of Cincinnati already proved that $3/gallon gas affects a percentage of the population, about 12%-15%.
That study was done in 2008 and I think I posted some of the results here then. It was focused on lower class, lower middle class and middle class households and defined it as minimal, moderate or drastic impact.
At $4/gallon, the lower middle class is forced to cut spending and alter their driving habits. At $4.50/gallon, about 25% of the middle middle class is forced to drastically cut spending and alter their driving habits. That increases to 40% when gas reaches $5/gallon and by that time, the lower-class and lower middle class have both altered their driving habits and have eliminated all non-essential spending. Single persons are less affected than households with more than one person.
That was for the Cincinnati MSA so other areas of the country that have a lower cost of living would have an easier time, while areas of the country that had a higher cost of living would be more affected. Obviously the Eastern Corridor and Chicago are minimally impacted, since they have well developed rapid mass transit, plus bus service. If I lived in Chicago and had a car, I'd only use it for grocery shopping. For everything else, dining out, clubbing, going to the cinema show, sports/arts, work, shopping for clothes or gifts or home items, going to the park I can walk, bike, or ride the rail/bus.
The Center for Policy Analysis at the University of Cincinnati already proved that $3/gallon gas affects a percentage of the population, about 12%-15%.
That study was done in 2008 and I think I posted some of the results here then. It was focused on lower class, lower middle class and middle class households and defined it as minimal, moderate or drastic impact.
At $4/gallon, the lower middle class is forced to cut spending and alter their driving habits. At $4.50/gallon, about 25% of the middle middle class is forced to drastically cut spending and alter their driving habits. That increases to 40% when gas reaches $5/gallon and by that time, the lower-class and lower middle class have both altered their driving habits and have eliminated all non-essential spending. Single persons are less affected than households with more than one person.
That was for the Cincinnati MSA so other areas of the country that have a lower cost of living would have an easier time, while areas of the country that had a higher cost of living would be more affected. Obviously the Eastern Corridor and Chicago are minimally impacted, since they have well developed rapid mass transit, plus bus service. If I lived in Chicago and had a car, I'd only use it for grocery shopping. For everything else, dining out, clubbing, going to the cinema show, sports/arts, work, shopping for clothes or gifts or home items, going to the park I can walk, bike, or ride the rail/bus.
I think that is a pretty good analysis, except for my previously mentioned statement that the lower and middle classes are likely in much worse financial condition now compared to the 2008 timeframe of the study. And, of course, the study concentrated only on the effect of higher fuel prices on driving habits. Add to that the inflationary effect that higher fuel prices have on everything else that we Americans buy, and things get much more painful.
You really do not comprehend that using a quart of lube oil is entirely different than burning millions of barrels of Oil for fuel?
I understand that lube oil(s) have a different usage model - and they still have to be produced & transported around the globe by a supply chain that burns oil.
My view on $5 gas is based on local observation...I know the Boulder area isn't the best representation of 'average America'...bring on $4 or more for a gallon of gas and make it stick long enough and this time around might be different.
Though his hyperbole tends to be a little shrill at times, James Kunstler's blog this week ( Wake Me, Shake Me - Cluster**** Nation ) should be a must read for anyone concerned about where oil (and fuel prices) are headed--and we should all be really, really concerned about it. He pretty much hits the nail on the head, through his often darkly humorous style, of why we are entering such a dangerous period. The whole blog this week is interesting, but this little tidbit is pretty telling:
Quote:
Also last week, Wikileaks released papers signifying that Saudi Arabia's oil reserves were quite a bit less than they had claimed. It was basically an old story, one that the late Matthew Simmons had published in 2005 just from poring over reams of production data from the Saudi oil fields. The difference in the Wikileaks story was that this time a Saudi Arabian oil ministry official confirmed the story. You can bet they are going to have problems keeping the flow rate up. They can sell off some stored inventory for a few weeks, but after that the world will know the truth: Saudi Arabia is in depletion and the oil markets will never be the same.
It hardly made an impression on a US public preoccupied with comings and goings of Charlie Sheen. President Obama wants to pretend that American life-on-wheels will just keep rolling along. He hasn't so much as hinted to the US public that the time approaches when gasoline will have to be rationed either by high prices or odd-and-even licenses plates or some other method. Charming fellow that he is, his fecklessness in the face of disintegrating oil markets will go down in history as something like Nero's musical solo while Rome burned down.
We may soon look at $5/gal. as pleasant nostalgia.
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Otherwise your addiction eats into your profits.
love keeping the board at the edge of its seat. Enjoying retirement I guess 
