U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Urban Planning
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 02-22-2013, 11:35 PM
 
Location: Vallejo
14,061 posts, read 16,066,811 times
Reputation: 12635

Advertisements

Quote:
Originally Posted by Geologic View Post
I think you have not gone far enough in your thinking...

+ Of course, the oil market is a global market, as you have said. The US isn't alone in wanting more oil than the world can easily deliver at current prices. Other nations want their oil too. The thing that you need to focus upon is: which countries can pay for the oil that they want in the future?

+ The US has a huge balance of trade deficit. It pays for its huge global military machine, and its imported oil by printing dollars, not by exporting goods that the world wants to buy. So far, all those exported dollars have found their way back to the US as foreigners bought US treasury obligations. But the huge appetite (for US bonds) that is needed to absorb the increasing ouflow of dollars is not infinite. China is already moving to reduce its holdings of US treasuries. And other countries may follow suit. So what is going to happen to the US dollar when many foreigners want to unload, perhaps all at once? Answer: the US$ will plummet.

+ The US dollar has remained stable so far, because other countries have wanted to create an advantage for their exports by making their currencies weak - the so-called currency wars. We saw a big drop in the yen over the last few months. And now it is Sterling's turn. And maybe the Euro is weak after that. These falls in other currencies have helped the dollar. But the US dollar's turn will come. And then when the desire to unload dollars takes root, the fact that so many foreigners hold such a vast amount of dollars will put the currency into serious weakness.

+ The US may find the benefits of a cheaper currency are not very useful. The main problem will be, as the dollar falls, then : oil-priced-in-dollars will go up. And the way that the US will experience a weaker dollar will be mainly through a jump in oil prices, and a squeeze on the car dependent.

I see this coming as sure as the sun will rise tomorrow, but I cannot tell you when. But I am sure that I do not want to get in the way of the next oil price debacle.
https://www.google.com/finance?q=JPY...dD6BoiUiQLlvAE

Helps to look beyond the corporate quarterly reports window. The Yen is still at very high levels.

https://www.google.com/finance?q=CNY...aDlPIiUiQLlvAE

Yuan vs USD -- very gradually been being raised. That's China buying less dollars. They're still buying them, but not at the rate they are maturing. They're down from a high of $1.25 trillion to $1.17 trillion.

The average American household spends around $4,000 on gasoline a year, a sizeable chunk. Of course, the average American household has an after-tax income of $55,000 a year (2007). I mean, if the world ends economiccollapiseblogspot.com style, maybe it'll be a horrific burden at the pump for the average family. A 10 or 20% drop in the dollar, however, only means spending 12.5 to 25% more on gas, or an extra $500 to $1000. We've already seen increase by far more than that, and amazingly society continue to function. It isn't pleasant, but it's economic reality and Americans are rich and absorb it relatively easily. A 100% increase in cost at the pumps saw a slight drop in vehicle miles traveled, a slight increase in average fuel economy of vehicles, and a slight increase in interest in living in more urban environments. Expect more of the same moderate changes to occur if your prediction is right.

 
Old 02-22-2013, 11:39 PM
 
Location: Vallejo
14,061 posts, read 16,066,811 times
Reputation: 12635
Quote:
Originally Posted by Geologic View Post
LOL.
M., you have forgotten something fundamental and basic.
China does not need to lend the US money to buy their goods. They can lend money to their own people to buy their goods. And that is exactly what is beginning to happen more-and-more in China.
Exactly. And if they want to keep selling the goods they're making to the US, that money they're now lending to their citizens will be spent on US made imports! Good bye trade deficit. Good for us, good for China (sort of, minus all the debt, but in the short term its good for them).
 
Old 02-23-2013, 12:22 AM
 
Location: Hong Kong
1,329 posts, read 872,207 times
Reputation: 217
Quote:
Originally Posted by Malloric View Post
The average American household spends around $4,000 on gasoline a year, a sizeable chunk. Of course, the average American household has an after-tax income of $55,000 a year (2007). I mean, if the world ends economiccollapiseblogspot.com style, maybe it'll be a horrific burden at the pump for the average family. A 10 or 20% drop in the dollar, however, only means spending 12.5 to 25% more on gas, or an extra $500 to $1000. ...
Thanks for the data, which I accept gratefully, and see no need to question.

But I do not think that the dollar slide need be as gentle as 10-20%. When the slide comes, it could be much more. Let's look at what happened to Sterling in late 2008-2009:



It fell from $2.00 to $1.40 - that's by 30% - over only 6 months. That allowed the UK to regain a competitive position, but it has not been permanent. Sterling is on the slide again. '

My point is that a 30% currency adjustment is not unusual. But there are cases of larger adjustments than that. And the overall adjustment needed to make the US economy competitive (without countries happily accepting its fiat currency in payment) may be more than just 30%.

If/When the dollar slide comes then US exports will benefit, but apparent from weapons and intellectual property (films, etc), the US now has a limited range of products to export. So a slide in imports may be what is needed to shift the balance of payments. I expect that oil imports may have to absorb a big share of the adjustment. If I am right, then car-dependent folks will be "sitting ducks", forced to change:

+ How much they drive,
+ What they drive, and even probably
+ Where they live

It will be a painful adjustment. But until the oil imports are brought way down (and even eliminated), it may simply be the first of several adjustments needed.

Last edited by Geologic; 02-23-2013 at 12:39 AM..
 
Old 02-23-2013, 12:33 AM
 
Location: Vallejo
14,061 posts, read 16,066,811 times
Reputation: 12635
http://www.cbo.gov/sites/default/fil...tax_income.pdf

Note, I wasn't precisely correct. $55,000 was the average income of the middle quintile (40-60% income bracket) after taxes. The actual average after tax income tax was $77,000, but that is skewed quite a bit by the Buffets and Gates. A 30% decline in the dollar would potentially mean a 42% increase at the pumps. Again, less than we've experience in the moderate term. Not pleasant, but easily absorbed.
 
Old 02-23-2013, 12:33 AM
 
42 posts, read 78,884 times
Reputation: 62
Quote:
Originally Posted by Malloric View Post
Baltimore has higher rates of obesity than its suburbs. Clearly urban environments cause obesity. Discuss.
I think you're inadvertently making the hugely significant point that the Environmental Health article that Katiana cited didn't control for other things that might cause obesity other than one's neighborhood. That the BU study didn't apparently control for factors known to correlate with obesity such as diet, income, and race is kind of appalling, almost as much as the punctuation error in the abstract ("and who's [sic] streets are almost universally lined with sidewalks")
 
Old 02-23-2013, 12:35 AM
 
Location: Hong Kong
1,329 posts, read 872,207 times
Reputation: 217
Quote:
Originally Posted by Malloric View Post
Exactly. And if they want to keep selling the goods they're making to the US, that money they're now lending to their citizens will be spent on US made imports! Good bye trade deficit. Good for us, good for China (sort of, minus all the debt, but in the short term its good for them).
In an ideal world that would happen.
But what I see here in Hong Kong does not bode well. The Chinese seem to prefer European goods. The exception being electronic devices like Apple computers or i-Phones. But nowadays, those devices are designed in the US, and manufactured elsewhere, and even in China itself.

The US is stuck exporting things like military weapons and Hollywood films - An exaggeration perhaps, but that is what the elites have left in the hollowed-out US economy.
 
Old 02-23-2013, 12:41 AM
 
Location: Hong Kong
1,329 posts, read 872,207 times
Reputation: 217
Quote:
Originally Posted by Malloric View Post
http://www.cbo.gov/sites/default/fil...tax_income.pdf

Note, I wasn't precisely correct. $55,000 was the average income of the middle quintile (40-60% income bracket) after taxes. The actual average after tax income tax was $77,000, but that is skewed quite a bit by the Buffets and Gates. A 30% decline in the dollar would potentially mean a 42% increase at the pumps. Again, less than we've experience in the moderate term. Not pleasant, but easily absorbed.
Previous oil shocks tended to be DOUBLES or more within a year or 18 months. Don't you recall oil shooting up from about about $45-$50 to over $140? After a big drop, something like $90 or so ( a DOUBLE ) looks sustainable.



That's why I talk of $5 to $10, for gasoline. And then after another correction, maybe $10 to $20. By the time it is over, I wonder if the USD will hold even half of its current value. There are many dollars now in foreign hands that they could be keen to unload.
 
Old 02-23-2013, 05:51 AM
 
Location: Nescopeck, Penna. (birthplace)
12,351 posts, read 7,501,291 times
Reputation: 15950
Quote:
Originally Posted by pvande55 View Post
Off the subject a bit but once cars get 54 mpg, quite realistic with turbocharged engines and carbon fiber bodies, driving will pick up, even more if oil prices collapse. And you think traffic is bad now?
And how much will those little puddle-jumpers weigh? And how safe will they be in the event of a collision with an SUV or heavyweight pickup, let alone an 18-wheel mastodon weighing 40 tons (combinations weighing more than that are allowed on some toll roads).

This is an issue with regard to which the public media have yet to as much as scratch the surface, and of which the typical white-collar suburbanite is woefully ignorant. It's true that we have the heaviest and best-maintained rail system in the world to carry our heavy, high-volume freight, but is not geared to local pickup-and delivery, and abandoned any pretense of such a generation or more ago.

There is no possibility of running a rail spur into your local mall or Wal-Mart; in most cases local freight movement remains tied to the 53-foot standard trailer van agreed upon about twenty years ago. If the powers that be insist upon forcing us into smalller, boxier, less-crashworthy vehicles, then the issue is somply going to fester unless a series of tragedies launch a MADD-type grass-roots movement. And the most such an advicay could hope for would be to limit the highways used and/or the hours of operation for a component of our infrastucture we can't function without.
 
Old 02-23-2013, 05:54 AM
 
Location: Hong Kong
1,329 posts, read 872,207 times
Reputation: 217
Quote:
Originally Posted by GoPhils View Post
So other countries can demand oil, but the US can't. Got it.

I admit I don't follow what's going on in Europe, but isn't their economy doing much worse than the US? Seems those ridiculous gas taxes haven't helped much.
Anyone can "demand" oil.
The US (per capita) is taking 5X as much as the average of the entire globe.

But the US is not paying for that oil with exports - as China and most other countries are doing - it is paying for it by printing its own currency. So far, it has cajoled the world to investing those surplus dollars it sends out into Us Treasuries.

Were you unaware of this? Do you think it is sustainable - that the demand for US treasuries is insatiable?

I was looking for something more up-to-date, but from this you can see that China has stopped growing its holdings of US debt



As foreign appetite waned, the US needed to find another buyer. It did... The Fed.

BTW, the Europeans have other problems with their economies, but the massive per capital addiction to oil imports that the US gas is not one of them.
 
Old 02-23-2013, 05:57 AM
 
Location: Hong Kong
1,329 posts, read 872,207 times
Reputation: 217
Quote:
Originally Posted by 2nd trick op View Post
There is no possibility of running a rail spur into your local mall or Wal-Mart; in most cases local fregiht delivery remains tied to the 53-foot standard trailer van agreed upon abouy twenty years ago. If the powers that be insist upon forcing us into smalller, boxier, less-crasworthy vehicles, then the iisue is somply going to fester unless a series of tragedies launch a MADD-type grass-roots movement. And the most such an advicay could hope for would be to limit the highways used and/or the hours of operation for a component of our infrastucture we can't function without.
Would it be a disaster, if Americans bought less foreign junk from places like Walmarts?

If they come to live in smaller homes in denser neighborhoods, they are going to have less space for that junk anyway.

Instead, they might buy more of their food from local Farmers Markets, and that might be a very good thing.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Closed Thread

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Urban Planning
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top