So Much for the Recovery

[Relic]

Iceland went bankrupt.

Ireland almost went bankrupt.

Greece is now owned by China.

Spain...we wish you well.

The wave hit the UK very hard.

This isn't even taking fueld prices into account. 34 airlines went bankrupt around the world.

The downside with a global economy are the links in trading and cross border financial transactions. When the house of cards in the US came tumbling down, it was felt around the world. Some countries are still reeling from it.

That's the premise of what I had posted earlier in this thread, (though not worded quite as well)

We're basically all in this together. To argue apples and oranges is fruitless.....

*bad pun intended for dramatic effect

 

[AntekStalich]

I'd like to give you a new idea, perhaps it has not been covered here yet.

There is strict (but not direct) relationship between oil prices and the strength of the US$. I'm paid mostly in US$, but I need to convert dollar to Polish Zloty (PLN) for living. PLN is kept tight with the European monetary system, so it more or less follows euro. So variation of the $ value directly affects my welfare.

Around 2001 (I'm quoting from memory and might not be top acurrate), the oil price was at the bottom, less than $10 per barrel. At that time, $ was strong with exchange rate over 4.00 PLN.

Around 2004/2005 oil prices went sky-rocketing and US$ fell even below 2.00 to PLN. In the worst moment, the oil prices were at the top. You may imagine my financial status over those years...

Then, the trend reversed with oil prices going down and dollar went up to 3.00 PLN. I recovered; the oil prices went down.

Now, I hope the relationship is clear. In the US, the prices of domestic goods may stay pretty flat, since American are paid in dollar and produce for dollar. But internationally weak dollar means more dollar needs to be spent for oil produced offshore.

Now, why $ is weak so much? I do not want to go political, but I'll give you my opinion. Tremendous imports from China and Far East mean pumping a big amount of $ into the international market. If this amount of $ were "printed" in the U.S., it would mean terrific U.S. inflation. But those money are pumped into the global system. This means GLOBAL devaluation of $, meaning high oil prices in the United States.

So, reducing production cost by offshore production backfired on the United States and of course for most of world's economy.

Do you think it makes sense?

 

[drummer5359]

I'm going to make myself a bowl of popcorn and come back and finish reading this thread, it's getting good.

 

[VS]

I'm going to make myself a bowl of popcorn and come back and finish reading this thread, it's getting good.

I'm enjoying Smartfood's White Cheddar,lol.

 

[AntekStalich]

Cottage cheese on Marmite here

 

[Relic]

coffee and a bagel on this side.

 

[AntekStalich]

...followed up with bacon on brown Lithuanian bread with sweet Spanish red pepper 0 deg F outside. The water supply system unfrozen with electric heating fan

The petrol price is $6.20/gal here. Compared to some EU countries, I should not complain. I got rid of Volvo with 16MPG and drive a Korean car with 27.7 MPG.

The life is wonderful!

 

[bmc]

Health conscious unsalted macadamia nuts and water. Two mandarin oranges from Sicilliy at my side.

In the long term, I'm less optimistic about US recovery for a miriad of reasons. As a military power, two campaigns have taxed the bank account and national appetite for more adventures. As a financial power, the influence is weakened and and I don't believe recovery will be to what it once was.

Over the past three years, a number of countries have been trading the USD cash reserves for other currencies due to concerns about the long term economic health of the US.

The deficit in the US is substantial and a cause for concern globally. Nations with high demand for oil are watching the events in the Middle East. If news sources weren't so focussed on the entertainment value of news (rock throwing, bloodletting, etc), it would be very interesting to get some analysis on Russia, China, India and Brazil and how they asses the events underway. You know, in the shadow of all the excitement, the fact that Iran pushed through some Navy vessels through the Suez canal for the first time in over 20 years. It didn't make Israel feel too comfortable.

We live in interesting time.

I apologize to the OP for writing so much on and off topis. Think I'll shut up for a while.

 

[jaywa]

Of course, we've taken so many steps since then to put ourselves in a more secure economic position, both as a country and individually, right?

+1. Sadly.

 

[Fishheadjoe]

The U.S. economy will continue to stagger, until the housing market gets back on it's feet. The housing market drives the economy.
Fishheadjoe

 

[TheVoiceless]

I hate your state...no offense,lol. I worked in the petroleum field for 8 years. It's sick how much gas stations can make when they feel like taking a little off the top. I managed service stations on Interstate I-95 for years at the Chesapeake House and Maryland House. I managed the 2nd and 3rd busiest gas/service stations by volume in the United States. Our average profit margin at the time was around 6 cents per gallon. There were times that gas would drop in price and we would be making about $1.50/gallon. -Luke

Well here is something I never thought of until brought to my attention. Say a gas station gets a shipment every Monday. They pay x-for the shipment. They are not getting another shipment until Monday, so why do they raise their prices on Thursday? Its that same delivery that's already paid for at x-$ Does that mean they lower their prices between shipments also?

 

[jaywa]

The U.S. economy will continue to stagger, until the housing market gets back on it's feet. The housing market drives the economy.
Fishheadjoe

Actually, employment drives the housing market... which drives the economy. People gotta be confident that the income is there before they sign on for a house.

 

[jaywa]

Well here is something I never thought of until brought to my attention. Say a gas station gets a shipment every Monday. They pay x-for the shipment. They are not getting another shipment until Monday, so why do they raise their prices on Thursday? Its that same delivery that's already paid for at x-$ Does that mean they lower their prices between shipments also?

They will raise the prices as soon as humanly possible, and drop them not one day before they are pressured to.

"Up like a rocket, down like a feather".

 

[Balog]

Hey, we're not complaining so much. We're just commenting on you guys complaining.

Higher taxes on gas in the US would help to address deficits, increase sustainability of resources and reduce environmental damage. It's been a long time coming, but it looks like you're finally catching up. $4 a gallon isn't anywhere near enough, but it's a move in the right direction. In the long term, prices just reflect the reality of the market and the global energy situation. Yes, it will suck, but it's in the post and that is pretty much that. Reality gets us all sooner or later.

I disagree with this on many levels. Deficits are a result of spending too much money, not failing top punish the productive enough. Prices are artificially inflated through corrupt regimes, failure to extract local oil etc. I fail to see how screwing consumers with higher taxes will help the environment. Etc etc etc

But really, I think this is a fundamental difference in our viewpoints on taxation, the function of .gov and so forth. So I don't really intend to get into a debate about the most basic tenets of your worldview on a bass forum's OT section.

 

[VS]

We would get calls from corporate to raise the prices for many reasons. They wouldn't tell us the reason of course, but it would become evident later on. Of course we would get calls to raise the price for heavy travel weeks, holidays & major events that bring tens of thousands of extra travelers on the interstate. The independant petroleum companies are just as much to blame. -Luke

 

[VS]

Well here is something I never thought of until brought to my attention. Say a gas station gets a shipment every Monday. They pay x-for the shipment. They are not getting another shipment until Monday, so why do they raise their prices on Thursday? Its that same delivery that's already paid for at x-$ Does that mean they lower their prices between shipments also?

We would pay "x" on say a Monday and then barrel prices would increase later that week. We would raise our "x" paid price to match the higher barrel price and suck the profit right up. -Luke

 

[Balog]

Sorry, but I think the billions that could be spent on drilling could be better spent on improving alternative energy technology. Technology advancement never sleeps, but it moves a damn sight more quickly with more money pumped into it.

For instance, did you know the amount of methane that comes off the US's many landfills is enough to power every car in the US? Your average gasoline engine will run quite happily on methane, and without the horrible fart smell. Combine that with the type of hybrid technology that can be seen in the Chevy Volt and there's one of many shorter-term answers to how to get by without using oil. Even without methane, the US has ample supplies of natural gas which is also engine-friendly and far cleaner, not to mention easier and cheaper to drill for.

Shame it won't happen while the US is being run by big oil. They have too much to lose.

Every "big oil" (oh teh noes, a corporation that is successful! That's proof they're evil! Hoe dare they make modern life possible by selling their hugely desired and urgently needed goods!) company is spending a lot of money doing R&D trying to find an alternative to oil.

Think about it: if oil is a finite resource, and your business is based on selling oil... wouldn't you be looking at what will replace it, and trying to be the leader in that field? If any alternative fuel was a viable alternative, "big oil" would be all over it. It's easy to simplify and just say "Oh yeah, there are tons of easy and readily available solutions, but that conspiracy of eeeevvvvvviiiilllllll corporations are just keeping us down."

Many people assume throwing money at a problem is some magical solution. It's really not.

 

[UncleFluffy]

On the demand side, there's a huge chunk of the world's population wanting access to the lifestyle we in the West have been having for the last century or so, and they're going to be buying oil to do it. On the supply side, I don't know how accurate the "peak oil" folks are, but if we're not there now we will be in a few years.

Alternatives will be found, but when and how much they'll cost is somewhat up in the air.

Oil isn't going to come down. Not in any meaningful, long-term way.

Plan accordingly.

 

[bmc]

The Geneva car show is next week. The pre show fanfare shows more hybrid and more electric cars coming to market. Exorbitant fuel prices in Europe and the UK welcome such alternatives with open arms. These kinds of developments to reduce our dependancy on potentially unstable, oil rich countries can only be a good thing. Add to that, the research into alternative fuels and it actually gets exciting. New research leads to new industries, technologies and job opportunities. In light of oil price volatility, this is great in the long term.

 

[Fishheadjoe]

I just don't see electric cars being the solution. Heck, yah have to plug the darn things in and you have to generate the electricity to charge them, so instead of paying big oil money, you'll end up paying "big electricity".
Fishheadjoe