Today I put twenty gallons of unleaded regular in my 1994 Ford pickup (small block V-6, 2wd, stick, no air)-- at the Kwik Trip on Grandview Blvd. in Waukesha, just off I-94.
The New York Times
Dollar Hits a New Low, Oil Hits a New High...
FRANKFURT, Oct. 18 — The dollar sank to a new low against the Euro Thursday as fresh evidence of losses in the mortgage industry stoked fears of a sharper-than-expected economic slowdown in the United States and crude oil rose to another record.
In late afternoon trading in New York, the euro traded at $1.4294, up from $1.4186 on Wednesday. Crude oil for November delivery rose $2.07, or 2.4 percent, to $89.47 a barrel. In after-hours electronic trading, the price rose slightly above $90.
$2.78 a gallon.
I might get this price a few more times, but by the time the oil--purchased at $90/bbl today--goes through a refinery in late November and appears on the market in Dec., I think the price will be up, WAY UP.
The paired trajectories of fuel prices (up) and the value of the USD (in free fall) are indisputable. Crunch time is upon us. A significant piece of the recent dip in gasoline prices is attributed to a one-time event: Third world countries that had been able to buy fuel when oil was $30/bbl to $60/bbl are simply dropping out of the market. What they do not buy appears as a temporary augmentation of supply.
The world's poor--those whose recent food source has been the energy-intensive Green Revolution--know that the intense energy inputs (fuel, fertilizer, pesticides, irrigation water pumped from ever-deeper wells) will be there no more. Here, we may feel the pinch--and, for some, more than just a pinch. In other parts of the world, people will starve.
Having this truck is pure fortuitous luck. I bought it for what a 12 year old truck would cost a few years ago. I keep it in good, safe condition--brakes, shocks, belts, leaf springs, oil, tune-up and tires (dents and rust matter little). I earn retiree-money by doing tree work, which makes the truck indispensible; but it is my everyday transportation, with a cost-per-mile that is way low.
For someone with a newish car or truck, with big payments and big insurance premiums, the coming uptick (should we call it a leap?) in gas prices is going to pinch.
But, if you are a mother in Honduras or Congo or Bangladesh, prepare to mourn your children.
Interesting comments, but I'm not sure about the facts. The American economy despite the "mortgage hysteria" remains strong. Sure the cost to fill the tank is going to go up, but that is more of a reflection of limited refining capacity, random fuel blend mandates, and temporary security concerns.
What will drive the third world to starvation is ethanol. Even a quick investigation regarding the amount of water, land, fuel (oil), and fertilizer required to produce a gallon of ethanol which will be subsidized 50 cents per barrel to yield less energy in the gas tank is shocking. Yet the new mandates keep rolling. We've seen nothing in terms of deforestation yet.
And yet the real world is energy hungry. Any solution must face the real facts about that. I say Go Nuclear!
You are absolutely correct. The American economy is strong. Our grand nation is able to print money to grow the money supply at a rate of almost a trillion dollars this year. What other country has the power and economic strength to print so much money. Heck, losing a few hundred billion here and there no longer is an issue, just print more. The foreigners we buy our stuff from will never notice we're paying them with less valuable money.
And yes, the mortgage hysteria, what a farce! Who really believes that American consumers will fizzle out because they have less credit and a tighter cash flow due to resets on only about 15% of the mortgages out there. Pfffft. 15% of households, that's not even a plurality.
OK, ok, I've been making fun of you. But, you do have a point regarding ethanol, which is about the dumbest fuel out there. I wonder what fool woke up first and decided, "hey, let's burn our food!!! That's a great idea."
Not so sure about nukes. Kind of a big risk given the nature of mankind and all. I do hear there is an unlimited source of energy that goes unused from some big ball of fire in the middle of the universe. Apparently the only pollution is from making the energy collectors and at current oil and natural gas prices, is almost on par in cost. Happily, neither Exxon nor Dick Cheney own this big flaming ball of energy producing fire, go figure. But what do I know, maybe Exxon and Dick Cheney do own the sun, kind of like Homer's boss Mr. Burns.
U. Benjamin Dover
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