The Economy

[DCColegrove]

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Yes I know that, thats why the price for crude has been going up for the last 5 years, China an India (which we industrialized for our own corporate bottom line) are thirsty as all hell for petroleum and are buying every spare drop they can. With our dollar tanking they have more an more buying power. We as a nation are reaping what we have sown, we have sold our souls for cheap shit an now we are paying the piper. You have to pay now or pay later, I think we chose later an the bill is due.

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Like I said we are paying the piper for the short term gain of some of the largest companies in the country an the world. Whos gonna get stuck holding the bag, you guessed it, Us the middle class working guys will have too foot the bill.

This is a very important statement worthy of bumping.

[E30ownerwithanopinion]

no dude.. the (financial savy) middle class IMO is in the best situation here.

They are the ones who are home owners... who have decent jobs and save money. I would suggest taking the monthly savings they put in the back and start buying the shit out of stocks!!!!

[mrsleeve]

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Like I said we are paying the piper for the short term gain of some of the largest companies in the country an the world. Whos gonna get stuck holding the bag, you guessed it, Us the middle class working guys will have too foot the bill.

[E30ownerwithanopinion]

I dont think oil is the only problem though... this housing crisis is really bad. To most Americans most of their wealth is their homes...I know I know most people here tend to thing all the eurooooooh parts represent wealth..but in reality its their homes... Because of some greedy mortgage brokers... we are in deep shit.... banks are failing and a lot of people are losing their jobs.

I dont blame just the investment banks with the CDO and MBS traders.. I blame the fuckers who were pushing such ridiculous loans threw the system

[mrsleeve]

^^^^^^^^^^^^^^^

Yes I know that, thats why the price for crude has been going up for the last 5 years, China an India (which we industrialized for our own corporate bottom line) are thirsty as all hell for petroleum and are buying every spare drop they can. With our dollar tanking they have more an more buying power. We as a nation are reaping what we have sown, we have sold our souls for cheap shit an now we are paying the piper. You have to pay now or pay later, I think we chose later an the bill is due.

[E30ownerwithanopinion]

Right now we dont need too much more crude. Crude supplies are up the distiled supply is kinda low (think gas and diesel) More refineries running at 100% instead of 70% would help or just building a few more would not hurt. Also we are using less fuel, demand is down something like 6% form a year ago.

The bigest problem is the speculation of all the comidies traders they ran the pric of oil up 3 bucks yesterday alone closed a 125.96 a barrel. If some one puts the towel on too tight in a oil producing county they run amuck with the speculation.

The you have the price of every thing else going up because diesel is 4.50+ a gallon and everything we use it brought to us by truck. Food is being driven up by the E85 craze as farmers swap over to corn production for E85 because it pay better, who could blame them. That in turn shortens livestock feed supplies driving that up, which in turn drives up any meat. Also every one swapping to corn means the other main crops are not being raised in the quanties they were before so that leaves them is somewhat short supply. Then you have the cost of fuel again on the farmer, and the truckers that bring it all to your local store.

be ready to grab your ass is gonna get a lot worse before it gets better

edit: I have heard reports of diesel jumping more than .20 cents yesterday to as much as 4.87 in places.

Dude.... I cant confirm or deny if American demand is up or down..but the world demand is much higher. India and China are buying a shit load of oil....

http://en.wikipedia.org/wiki/Petroleum#Consumption_rates

[mrsleeve]

we dont need much more crude???? so using our own resources is not a good idea in your mind? i guess i dont understand being tied to someone elses oil when we have our own.

I think you kinda miss understood my point. What I was getting at is our current supply of crude stock is high right now and the distilled is in short supply even though our usage is down bout 6% from a year ago, an the price is through the roof with no end in sight. I see #2 road use diesel has hit the 4.99 mark in some places today. What do you think thats going to do to the farmers making food the trucks bringing it and everything else to our stores. Its gonna make the prices go even higher.

I am in no way saying not to drill for our own. I fully agree that we need to using more of our own supply to help put good paying jobs back in the market now that so many have gone off shore. I dont care if you have to drill through a baby polar bears head to get it, get the damm oil. I will say again the speculation on futures for fuel has run amuck and is way out of hand. I tend to think its much like the housing bubble, it will pop in its own time, when I cant even pose a guess but I dont think our economy can handle this for too much longer. How much damage will it do to every other sector of the economy till that happens again I have no Idea.

[E30ownerwithanopinion]

Econ student?-->moneyshift

I agree I get the feeling that he is typing out his text books..........

[CorvallisBMW]

... we need to drill in ANWR ...

The problem is that even under the most optimistic estimates, it would still take 8 years for that oil to reach the market. It's not as easy as opening up something for drilling, and the next day it's pumping crude into the market. By the oil company's own estimates, it would take 8-10 years to build all the drills, platforms, pipelines, ports, etc just to get it to refineries.

I think we will have to drill there as oil supplies around the world dwindle, but it wouldn't do anything to solve our current problems.

[mtechnik]

Economics is just screwing us all over. Sorry for the real basic jabber but it's like DAMN IT lately.

I for one am wishing that the € would just crash. Now over here in Europe were stuck with the excuse that the oil market is in dollars..that''s the reason for the prices still remaing high over there too...

Everything's been a reason for oil prices to edge up further and further. Katrina, Nigeria strikes etc etc etc.

Last week it took €76 to fill my tank up from a little above empty. Today the price at Esso was 1.52 for RON 95 and 1.62 for RON 98.

[mongule]

Econ student?-->moneyshift

[Money$hit]

I think we can all somewhat agree on what's happening.

The Dollar's devalued because they just keep printing more to cover past debt.

Buying cheap shit from China is finally catching up.

The big guys rake whatever they can off the top by trading options etc.

Me, I'm tough I can live in my car...

But it's hurting my kids now.

So...

I "wana" kick Some Ass...

So...Who Gets the Grade "A" Ass Kicking?

Long explanation, but I dont think buying up cheap shit from China has caused the situation we are in. Placing trade restrictions/tariffs has a long term net effect of zero. It doesnt hurt or benefit a country. It is another drawn out explanation based on models, empirical evidence, etc.

[Il Duce]

The middle east and then our gov

Does anyone else see how fucking backwards this is?

[DCColegrove]

I think we can all somewhat agree on what's happening.

The Dollar's devalued because they just keep printing more to cover past debt.

Buying cheap shit from China is finally catching up.

The big guys rake whatever they can off the top by trading options etc.

Me, I'm tough I can live in my car...

But it's hurting my kids now.

So...

I "wana" kick Some Ass...

So...Who Gets the Grade "A" Ass Kicking?

[Money$hit]

We are currently in a situation of stagflation, that is, we are experiencing simultaneous inflation and recession.

To squelch the recession, the Fed tries to increase GDP by pumping money into the economy, (I.E. stimulus plan money, rate cuts, etc). Since GDP = Consumer expenditures + Investment + Government expenditures + net exports, any way the government can increase any one of these components, they will try. They have clearly taken a dead aim at consumer expenditures with the stimulus plan, considering this component makes up approx. 70% of GDP.

However, with actions such as these, the Fed prints more money. By printing more money, you cause inflation to increase. As defined by the quantity theory of money, changes in inflation rate are directly correlated to changes in money supply. Print more money, have more inflation. Print less money, inflation decreases.

In a situation of stagflation, a govt must weigh its options. Solve the issue of recession and make inflation worse, or solve inflation and make the recession worse. Its a difficult trade off, but by using the AD/AS model, it is easy to see why goods are becoming more expensive and the dollar is taking a major shit versus other currencies. The Fed has printed so much money that inflation has increased, while I feel that recession fears are subsiding.