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If my memory serves me right this is the time of the year gas is typically at it lowest point of the year. Let see NO hurricanes this season. NO terrorist attacks. TG. NO refinery fires or maintenance outages. NO major increases in demand. YES to price increases. What am I missing? Can you say monopoly?
Spring is when we see the highest prices of the year. OMG is that the price of a gallon of gas or a gallon of milk? Which one will hit $5 by spring 2008???? Yikes!
Am I the only one who can see it's both supply based and inflation based? Oil is up to $96/barrel because the Fed cut rates. Until they raise rates, you won't see oil come back anytime soon, even if Iran were to be "liberated".
I am pouring my money into energy based stocks and definitely got the Halloween treat as a result. Those who are complaining about gas prices should do the same.
Am I the only one who can see it's both supply based and inflation based? Oil is up to $96/barrel because the Fed cut rates. Until they raise rates, you won't see oil come back anytime soon, even if Iran were to be "liberated".
I am pouring my money into energy based stocks and definitely got the Halloween treat as a result. Those who are complaining about gas prices should do the same.
Frudy I agree as the dollar continues in free fall oil prices will increase unabated until demand weakens. But it would have to weaken word wide to make a difference. If it weakens on the US and Europe, India and China are more willing and able to take up the slack.
But as they say what goes up must come down. I hope you time the sell orders right and lock in those gains mt friend.
I'm trying to help America rebuild its Financial health by investing in my old savings account until this market settles down. Its amazing what American banks can do with working capital, they actually invests in mortgages and growth right her in the US of A. What a novel idea. IMHO we as Americans made enough non Americans wealthy. Now we are feeling the affects of that overseas investment strategy.
Frudy I agree as the dollar continues in free fall oil prices will increase unabated until demand weakens. But it would have to weaken word wide to make a difference. If it weakens on the US and Europe, India and China are more willing and able to take up the slack.
But as they say what goes up must come down. I hope you time the sell orders right and lock in those gains mt friend.
I'm trying to help America rebuild its Financial health by investing in my old savings account until this market settles down. Its amazing what American banks can do with working capital, they actually invests in mortgages and growth right her in the US of A. What a novel idea. IMHO we as Americans made enough non Americans wealthy. Now we are feeling the affects of that overseas investment strategy.
The energy companies I invest in are foreign holdings from net export nations. Tar sands in Canada, Norwegian oil services, etc etc. Oil services b/c the rigs desperately need repair and oil companies tend to put it off until pipelines burst and rigs collapse when its costs A LOT more to fix. Also, companies that do liquefied natural gas (spoken for by the Asians) shipping. Coal will be huge in the coming years to help stave off oil price spikes as households quickly try to switch to electricity. Problem is that the generation of miners are retiring and the yongins' do not wish to take their place.
Like you just said, the world will buy what we won't or can't. As such, I don't see a need to sell in the near future. Also, I'm diversified in gold (physical and Perth Mint certificates of deposit), a basket of foreign currencies, and short term government bonds to westernized countries like Australia, Germany, and Japan.
Huh? Please explain how the Fed's decisions affect the market for this resource.
And please explain how: 1) increasing global demand 2) impending home heating season 3) profiteers are NOT affecting the price.
But ditto on the energy stocks/funds, too bad you waited so long to get in.
When the Fed reduces rates, it is a direct implied tax on all Americans, and worse for savers of dollar and dollar denominated assets. More money enters the system, causing its intrinsic value to decline (since 1971 there is no backing other than "faith" in the system). More dollars printed chasing a constant set of goods means the value decreases. This has a direct effect on the price of crude. When the stock market increases, you have to take into account REAL increases, since that money is illiquid while you have it invested and its value erodes over time.
Fed rate decrease = more cheap money = less value to money = cost of crude rises relative to US dollar. Politicians like it because they don't have to explicitly state that they're increasing taxes. They can simply use the surplus debased dollars to fund entitlement programs, while the cost of goods and services shoot upward. Food, energy, health care, the essentials have tracked significantly higher than the bogus CPI the gubmint hands out. Consumer electronics are a significant portion of the indicator and they exclude food/energy. Last time I checked, you can't eat a television set or use it to heat your home.
Ben and the Fed boyz has been figuratively dropping money from a helicopter since 2000 with artificially low fed rates, causing the value of the dollar to fall 40% against a basket of currencies in 7 years. It affects not only your trip overseas, but for the products we import, including crude oil.
The left will blame "greedy" oil companies. The right will blame not drilling in ANWR. There will be enough excuses to go around when oil reaches 110-150/barrel.
Lowest tax on a gallon of gasoline.Plus they actually have a few refineries in the state and get this MASS TRANSIT!! Yes you really CAN take a train, Bus or even a boat to either NYC or Philly to get to work. Unlike the awful situation here in the triangle.
They really are doing everything wrong down here. The infrastructure is overwhelmed, schools roads no mass transit not enough water the same BS that Atlanta did and they are really in deep you know what with water. Oh well time to sell this place in Fuquay and find the new place out of the southeast.
Yes...all these things about New Jersey is great, except for the fact that you have to live in NEW JERSEY! Yuck!
But seriously....
They may have low taxes on gasoline, but what do they have instead? Some of the highest property taxes to make up for it. Whereas our property tax rates hover around 1%, it's around 3% in NJ. People are complaining about $3500 tax bills on a $350,000 house. What would those people do if their tax bill shot up to $10,500? If we had 3% taxes, our local government would quickly have enough money to improve our infrastructure, schools, roads, trains, water, etc... But we'd also be stuck with 3% property taxes.
And they may have mass transit, but traffic congestion is still HORRIBLE throughout that entire corridor. Mass transit is feasible there because it's often faster to drive to a train station and take a train than to drive. And that's not because the trains are fast, but because the traffic is horrible and the roads are woefully underfunded. So if you want trains here in the Triangle to be feasible, you're going to have to solve the current "problem" of it being easy to get around in a car.
Sorry...but I'll take the "they-do-everything-wrong-here" Triangle over New Jersey any day.
When the Fed reduces rates, it is a direct implied tax on all Americans, and worse for savers of dollar and dollar denominated assets. More money enters the system, causing its intrinsic value to decline (since 1971 there is no backing other than "faith" in the system). More dollars printed chasing a constant set of goods means the value decreases. This has a direct effect on the price of crude. When the stock market increases, you have to take into account REAL increases, since that money is illiquid while you have it invested and its value erodes over time.
Fed rate decrease = more cheap money = less value to money = cost of crude rises relative to US dollar. Politicians like it because they don't have to explicitly state that they're increasing taxes. They can simply use the surplus debased dollars to fund entitlement programs, while the cost of goods and services shoot upward. Food, energy, health care, the essentials have tracked significantly higher than the bogus CPI the gubmint hands out. Consumer electronics are a significant portion of the indicator and they exclude food/energy. Last time I checked, you can't eat a television set or use it to heat your home.
Ben and the Fed boyz has been figuratively dropping money from a helicopter since 2000 with artificially low fed rates, causing the value of the dollar to fall 40% against a basket of currencies in 7 years. It affects not only your trip overseas, but for the products we import, including crude oil.
The left will blame "greedy" oil companies. The right will blame not drilling in ANWR. There will be enough excuses to go around when oil reaches 110-150/barrel.
I somewhat agree with some of your assertions. But some of your points are not clear. I agree that inflationary policies are a good way to "tax" the populace without their knowledge. However, the root cause of this is uncontrolled deficit spending, not Fed rate reductions. The government needs to sell bonds to make up the difference between revenue and spending, and those bonds are what cause the value of the dollar to decline. Deficit spending also has a long-term depressing effect on an economy, since those funds are going to have to be paid back sometime. The long-term negative prospects for the U.S. economy also weighs heavily on the dollar.
But you point the finger at the Federal Reserve Bank. This is where I don't follow your reasoning. What direct benefit does the Fed see when they lower interest rates? They're not making any money off of it. Rather, they're simply trying to use rates to stabilize the economy effected by deficit spending. Since deficit spending depresses the economy, the Fed has to lower rates to prop it back up. This may introduce more money into the economy and trigger inflation. But they HAVE TO lower the rates, or else the economy may slip into recession. Their hands are tied. It's the deficit spending at the root of the problem, and that's not controlled by the Fed.
But if you ask me, it's actually quite brilliant. Using the "reduce taxes AND increase spending" approach, the Republicans have figured out a way to tax Americans without them even realizing it. And all that the people can see is that their tax bill is going down and the government isn't reducing services. People don't realize that they're indirectly paying for it all through higher prices. I can't help but to be in awe of the genius of their plan...in a sort of Dr. Evil type of way.
Gas was $3.10 in Clayton back off of Cleveland RD over the weekend (further down by the Hunter's Mills and Broadmoor neighborhoods). Of course when you are the only gas station for miles and you have a large convenience/hardware store onsite your overhead is more than just purchasing gas. Got into downtown Clayton and it was $2.83.
Last edited by tluv00; 11-05-2007 at 09:28 AM..
Reason: Wrong gas price
I somewhat agree with some of your assertions. But some of your points are not clear. I agree that inflationary policies are a good way to "tax" the populace without their knowledge. However, the root cause of this is uncontrolled deficit spending, not Fed rate reductions. The government needs to sell bonds to make up the difference between revenue and spending, and those bonds are what cause the value of the dollar to decline. Deficit spending also has a long-term depressing effect on an economy, since those funds are going to have to be paid back sometime. The long-term negative prospects for the U.S. economy also weighs heavily on the dollar.
But you point the finger at the Federal Reserve Bank. This is where I don't follow your reasoning. What direct benefit does the Fed see when they lower interest rates? They're not making any money off of it. Rather, they're simply trying to use rates to stabilize the economy effected by deficit spending. Since deficit spending depresses the economy, the Fed has to lower rates to prop it back up. This may introduce more money into the economy and trigger inflation. But they HAVE TO lower the rates, or else the economy may slip into recession. Their hands are tied. It's the deficit spending at the root of the problem, and that's not controlled by the Fed.
But if you ask me, it's actually quite brilliant. Using the "reduce taxes AND increase spending" approach, the Republicans have figured out a way to tax Americans without them even realizing it. And all that the people can see is that their tax bill is going down and the government isn't reducing services. People don't realize that they're indirectly paying for it all through higher prices. I can't help but to be in awe of the genius of their plan...in a sort of Dr. Evil type of way.
The benefit the Fed receives by lowering interest rates is also an implicit bailout for the boyz at Wall St., or hedge fund managers (the term is better noted as "high risk" or "highly leveraged" rather than "hedge" funds), by providing them access to cheap money at the expense of the poor and middle class, whose largest share of expenses are the products that are escalating in price. Namely: food, energy, and health care. Luxury items and consumer electronics offset these price gains according to the gubmint figures. Also, the Fed is seen as the heroes by acting responsively to a problem. Unfortunately, to some like myself, they're responding in the opposite manner of where they need to go.
The Fed works for the banks, not the people or even the government. The Federal Reserve is no more federal than Federal Express.
A recession is unavoidable, and raising interest rates will at least contract the money supply to where it needs to be and create a strong dollar. The other alternative, bringing rates to zero, will cause our foreign trading "partners" to dump our debt quicker than you can say "bankrupt". Think best case Japan in the 90's, and worst case Russia in the 90's, or worse.
What's better? Quick and painful, or long lasting pain?
Just wait until the war in Iran starts (research the issue and you will see many plans are in place) then we will see where gas goes....
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