Monday, March 26, 2012

Oil be devastated

Amid new concerns in the Middle East, the less than spectacular Home Sales Report, and the Fed Chairman's comments that things would remain the same in the loan interest markets, oil prices have increased yet again.  Of course, there are those still sitting around thinking this is a good thing, that the larger prices will produce more jobs and the economy will not only survive with the higher prices, but will in fact excel.
And these guys get paid a large amount to blow smoke up your fourth point of contact (your rear for those non-military).
While, as I stated in previous posts, there are those who are finally starting to show concern that the increase in oil prices will deflate the struggling global economies, it is only a mild concern, and most think that we will weather this just fine.  But here are some figures, about a year ago we were paying about two and a half bucks, now we are paying nearly four per gallon.  This is a 60% increase in gasoline prices in just over a year.  Considering that our economy is based partly on the transport of the consumables, the truckers must charge more to move the items, which means the stores must charge more.  While the increase in fuel prices in relation to the transport of goods would spread out, the rate of inflation would increase at unhealthy leaps.
Of course, I am not telling anyone anything they haven't already noticed.  Anyone who has shopped for groceries in the last six months can see the difference in the amount of bags they bring home.  Two hundred dollars does not buy nearly as much as it did a year ago.  The military was awarded a 1.5% pay raise this last year, yet their pay goes only about 70% as far considering the fuel prices and the increase in food.  So if my purchasing power decreased by around 30% in just over a year then how is this unjust increase in oil something that is GOOD for the economy?
Remember, before all you naysayers take my numbers above and try to discredit them, First I am using generalizations, but I am also including such things as the increase in utilities cost due to the increase in fuel prices.  You didn't think these companies who make entirely TOO MUCH money from us consumers would actually absorb the costs did you?  Look at what your check gets you today.  I guarantee other companies are beginning to feel the pinch yet again as consumers must choose necessity over pleasure.  One of the first things to go in this household is the cable.  Ironically, I have more channels (shows) available online than with cable, so the only thing I am missing is the high prices.
Eventually, these price boosters are going to realize they are hurting themselves and the prices will drop to more manageable rates, or we will definitely be deep into another recession and whether you believe it or not, there is little political ramifications that would be honest.
The only way to prevent this is to actually decrease our dependence to the point that the amounts in reserve make it not nearly as profitable, of course this would mean that we would have to start using alternative means of transport, so while the thought is nice, the reality is, we are slave to the jackasses trading the commodity and using price gouging techniques to cripple the world.

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