Thread: Inflation

Inflation is not generally good for the market. It gives Greenspan another reason to raise rates. I don't know too much about it but I hear economists talking about controllingdeflation as it could be a bigger problem.

I believe this oil price climb is temporary. It seems like it happens every few years and then things come back to normal. Right now it just happen to be the new reason for market concern. Every time we get bad news from Iraq, oil jumps up and the market reacts negatively.

I wouldn't put it past some bears that were heavily short the market starting the wedding party bombing rumor. The military is disputing the news as I hear it. Cramer at thestreet.com talks about this type of unscrupulous behavior going on when things get away from larger investors. It's illegal but it sure worked today if that was what it was.

Re: escalationin the price of crude

Since JerBer's original post in May of 2004, almost 18 months ago,the price of oil is roughly 50% higher, even after the recent pullback.

I believe oil is going higher mostly due to Asian demand. Third world countries are coming into their own Industrial Revolution and there will be many Asians moving from poverty level to middle class.An increase in Asian, particularly Chinese,automobile ownership and use willkeepintense upward pressure on oildemand and pricesfor some time to come.

Of course, any disruptions to normal supply vianatural disastersand terrorism will only aggravate what is currently seen as a very serious situaton.

Suburbistan will increasingly feel the effect of high oil prices. As commuters in the burbsfeel the crunch of gas prices at the pumps, they will be looking to trade in their low gasmileageSUVs for high gasmileage hybrids.Some may even decide to unload their homes in the burbs for something a little closer to where they work. Suburbistan Malls could become little ghost towns unless employers begin adopting a more liberal telecommute policy...and soon. We can hope...can't we?

Thecurrent price of crude at $60.00would be around $25.00 in 1980 dollar terms and in 1980-81 I think the price reached about $50.00 a barrel. Today,it would have to hit $120.00 per barrel of crude tobe theequivalent of the 1980-81 highs. I think the Asian factor will take the price signficantly higher than $120.00 per barrel in the next 4-7 years. $6.00-9.00 a gallon at the pump would not be an unreasonable expectation, but it would have a significant impact on consumer spending and travel.

Yes, the price of crudewill come down, but from much higher levels, in my opinion.

You would have thought the US would have learned its lesson around 1980, but nope, our country went back to its lazy wasteful habits. So here we are, listening to the doom-and-gloom about energy prices again. My vehicle is powered by soy milk, coffee and tea. Happy to be a mizer. o

bkrownd wrote:

Happy to be a mizer. o

Grrr... Miser, dang it. :h

bkrownd wrote:

My vehicle is powered by soy milk, coffee and tea. Happy to be a mizer. o

Good for you! You are saving money and improving your health at the same time.

My vehicle will be twenty years old next year. Licensing is about 20 some odd dollars a year and full coverage insurance is about 250 a year. Why full coverage insurance on a car this old? If I need to take a long distance trip (vacation)where reliability could be a concern, I just rent a car and pretend for a weekor two I'm a consumerist. My personal insurance covers rental liability/collision for the full value of whatever I rent as a replacement vehicle. If my personal car breaks down locally, I just call AAA and have it towed and repaired. It has about 250,000 miles on it and gets about 20 miles to a gallon and runs like a top.

If someone gave me a new car, I would sell it immediately and buy something of value with the money. A new car would probably cost me 300-400 dollars a year tolicense and I have no idea what the annual insurance premium would be, but I'm sure it would be much more than I'm willing to pay. I can't bear the thought of the opportunitycost/lost of buying a new vehicle and theassociated overhead.

Wimpy wrote:

My vehicle will be twenty years old next year

Right on yer tail at 18! Unfortunately moving to hawaii has cut my poor car's life short by 5+ years, as I'm losing the battle with rust in this pea soup they call "air" here, even though it spends almost all month sleeping safely in the garage. The damn humidity corrodes everything inside and out. I just need it to stay together until I get off this rock...

I am looking now at a 30 year old VW convertible to purchase. Like you guys I hate new cars because they are just such bad investments. I figure a VW convertible has to at least maintain it current value and has the potential to go up in value. There are very few vehicles you can buy and actually use regularly that will maintain there value.

With all the broken down cars I see driving to work, I'm contemplating buying a wrecker! If I can get one tow either going to work or coming home, I've paid for my gas and my car payment for the day!!! :^

mlk_man wrote:

With all the broken down cars I see driving to work, I'm contemplating buying a wrecker! If I can get one tow either going to work or coming home, I've paid for my gas and my car payment for the day!!! :^

Great minds think somewhatalike!

I’ve thought about buying a wrecker myself and possibly starting a salvage business. A wrecker and salvage yard business could be quite profitable over the next 4-7 years. The state will be wanting to clear the roads of all those SUVs parked alongside the road that ran out of gas and the banks will need someone with a wrecker to do repo work for them. The banks will soon find out they can get more money for the repo’d SUV by salvaging it for scrap metal than they can by selling it as transport. I will then step in and hand them my business card, 'Wimpy's Wrecker and SUV Disposal Service -- We Weigh and Pay on the Same Day'.

Can you imagine trying to unloadan SUVs when no one wants one? You’ll pull into the auction lot and instead of them gathering any information about year, make, model, or condition…they’ll just want to weigh it.

Instead of buying a new car with my wrecker and salvage business profits, I'll roll those profits into distressed homes andproperties. The best time to buy homes and property is ina sea of foreclosures.

Have a friend who owns a wrecker service. Gov regulations and insurance is a killer. Tough business.

Sounds like a plan. But how often do you think you'll hear "I'll gladly pay you Tuesday for a tow today"..............:P