What the *bleep* is going on? - gas prices (mortgages, month to)
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People in the USA can't seem to grasp this. But folks from Brazil, or Argentina would.
I wonder when we'll revalue the dollar by chopping a zero off. I'm 44 years old and remember 15¢ candy bars, milk at $1.29 a gallon. I asked my parents about prices a few months ago. My dad said gas was 25¢ a gallon in the 1950s. He rented an apartment for $40 a month. My mother said chicken was 10¢ a pound.
The US mint loses money, minting pennies and nickels today. The metal content is worth more than their face value.
I remember 25 cent candy bars... but I also remember all the times I couldnt get money to buy them because money was tight. The next time you talk to your parents ask them if they thought gas was cheap back when they were buying it in the 1950's.. chances are they complained about it going up from 23 cents to 25 cents.
I think gas prices jumping from 1.09 to 3.75 in the last 10 years is the real problem...
As far as comparing our consumption to other countries... whatever, we drive and cut back when it gets around $4.00. There is no lesson to learn, technology will reduce consumption, we drive.. its what we do and countries like China are driving as well now that they are finally making money.
The US mint loses money, minting pennies and nickels today. The metal content is worth more than their face value.
Quote:
Originally Posted by frewroad
Everyone in the world seems to know it except for average Americans.
Three questions for you both:
1) You think that the devaluation of the dollar is the sole reason for higher prices? In other words, do you not think there's any (or little) manipulation of the market?
2) Not that there's the will to do it, but what's the solution? Tie the dollar to gold, somehow?
3) Do you foresee this getting much worse in the near future?
I do think supply constraints factor into the price swings in addition to the devaluation problems. In the 1950s if demand went up, then more oil could be pumped and more gas refined. There was little reason for speculators to bid up futures contracts.
Refining capacity is also a problem. We don't build refineries in the US, the ones we have are under more environmental and safety scrutiny than in the past. They're expensive to operate and the big oil companies don't even like the business very much. It's complex business to make money in, depending on the types of fuel blends produced, and refineries are capital intensive projects.
I think what's happening now is that the economy has trouble getting on solid footing - as soon as it appears a recovery may be taking hold, fuel prices rise. But they can't rise very far before cooling the economy back.
If we suddenly had access to $1 a gallon gasoline again, shipping costs for nearly everything would fall. People would feel like they could afford far flung suburbia again. Construction would pick right up. It'd be a "wealth effect" and stimulative.
In general I follow the "bumpy plateau" theory. Technology is finding ways to get oil out of the ground which had been thought inaccessible. But it can't bring a *bounty* of oil... enough to bring prices back to historical levels. There just aren't any fresh Spindletop or Ghawar fields waiting to be exploited.
Supply and demand. Prices are only going to go up until we start drilling offshore and piping out of Alaska and become self sufficient with our own oil production.
China is gobbling up oil so the middle eastern oil barons don't have to fiddle w/ the USA any longer . .. they have a new partner and that new partner has $$$$ and a growing economy.
It is such a simple situation . . . I don't know why anyone would be scratching his/her head about the reasons for gas prices skyrocketing.
China is drilling right off our coast ...
Drilling is not going to solve the problem.
Only reducing Oil Consumption in the US will begin to solve it.
And that solution is long term and requires a degree of enlightment amongst car dependent dependent suburbanites, that may be years ahead. AND will likely require another major oil price shock or two, to wake people up.
1) You think that the devaluation of the dollar is the sole reason for higher prices? In other words, do you not think there's any (or little) manipulation of the market?
2) Not that there's the will to do it, but what's the solution? Tie the dollar to gold, somehow?
3) Do you foresee this getting much worse in the near future?
It will get much worse - a Big Price Shock is probably necessary - to reign in US oil consumption.
Look at the denial and pushback that I get when talking about the reasons for carfree living.
When everyone gets it, and is seeking to dial down their oil use, then we will be closer to a long term solution. The US is not even in the foothills of a solution, and there's a long and tall mountain to climb.
Remember, all that money printing is to pay for oil that we cannot afford, and a vast military machine that the government is unwilling to put into our taxes.
You should be getting angry at the government and the elites for the way they are "gaming" the Middle Class, not at those brave souls who are trying to awake the MC from their slumber.
In general I follow the "bumpy plateau" theory. Technology is finding ways to get oil out of the ground which had been thought inaccessible. But it can't bring a *bounty* of oil... enough to bring prices back to historical levels. There just aren't any fresh Spindletop or Ghawar fields waiting to be exploited.
Technology is not going to solve* this problem - it hasn't done so yet.
And the ticking time bomb of all those dollar assets in foreign hands is getting louder. If the foreign seek to unload at once (as China is already doing slowly), then the dollar's going to fall through the floor, as oil-priced-in-dollars starts a big moontrip.
=== ===
*Unless there is some truth to the idea of Free Energy
I think what's happening now is that the economy has trouble getting on solid footing - as soon as it appears a recovery may be taking hold, fuel prices rise. But they can't rise very far before cooling the economy back.
It will get much worse - a Big Price Shock is probably necessary - to reign in US oil consumption.
Look at the denial and pushback that I get when talking about the reasons for carfree living.
I respectfully disagree.
Look, you make many good points in favor of mass transit, and I agree with some of what you have to say.
You're entitled to your opinion, but I don't understand why you favor ditching automobiles altogether. Surely there are other domestically produced fuels that could be used in lieu of gasoline.
Quote:
Originally Posted by Geologic
You should be getting angry at the government and the elites for the way they are "gaming" the Middle Class, not at those brave souls who are trying to awake the MC from their slumber.
That's an interesting point. A good five or six years ago, I do remember an argument being made in favor of limiting the price of the barrel to a certain point, lest consumers find themselves fed up with gasoline, and a serious desire for alternative fuels gets under way.
I'm surprised that people aren't more vocal (in a productive way), about the high cost of oil.
Sean, I thank you for sharing your thoughts
"... the economy has trouble getting on solid footing - as soon as it appears a recovery may be taking hold, fuel prices rise. But they can't rise very far before cooling the economy back."
Hmm...
The formula taking us into the No-Growth "Long Emergency"
Listen to this podcast, where JH Kunstler interviews JM Greer, the arch-druid:
I respectfully disagree.
Look, you make many good points in favor of mass transit, and I agree with some of what you have to say.
You're entitled to your opinion, but I don't understand why you favor ditching automobiles altogether. Surely there are other domestically produced fuels that could be used in lieu of gasoline.
I am not sure why you think that? My main idea (for the US): is to move towards "car-light" living, as you see in much of Europe. That means smaller cars, with greater fuel economy, and much more mass transit - commuting by trains and buses.
My main idea (for myself): is to seek a place where I can live carfree - BECAUSE the closer I can get to that ideal, the less I will feel the future oil shocks. But I don't think that everyone needs to carry it so far.
But like JHK and others, I don't think that new ways of powering cars is going to be any more than a very small part of the answer. The real answer is to CHANGE WHERE AND HOW PEOPLE LIVE, to live with a much reduced amount of car-and-oil-dependency.
The way I see it, it is almost impossible for a person who is wide awake to the-risks-I-see to live in America, so addicted in the US economy to cars. But I no longer accept that staying-away as the correct final verdict. US Property prices are now low enough, and the understanding of the oil price risk is growing, so NOW may be the right time to look for those pockets where people can live in a sensible Car-Light way. Or, I may be early... once again.
Quote:
Originally Posted by NDL
That's an interesting point. A good five or six years ago, I do remember an argument being made in favor of limiting the price of the barrel to a certain point, lest consumers find themselves fed up with gasoline, and a serious desire for alternative fuels gets under way.
I'm surprised that people aren't more vocal (in a productive way), about the high cost of oil.
We agree on that last part.
I suppose people just do not want to face the hard choices, if it means disrupting their habitual ways of living. My "purist" - an almost zen-like, single-minded discipline - will go far beyond what most people are willing to contemplate.
Zen in the Art of Carfree Living
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