Mr Mortgage Was Robbed This Weekend - You’re Next
Posted on May 19th, 2008 in Mr Mortgage's Personal Opinions/Research
My family and I were retuning from the lower Sierra Nevada foothills today after enjoying a beautiful weekend at our favorite lake. The water was great, skiing wonderful and fishing fantastic. We didn’t want to leave…it was one of ‘those’ weekends.
On the way home, I stopped at the local Chevron to fill up, as I have done dozens of times in the past. I pull up to the pump, swipe my card and quickly jump back into the truck while the innocent looking device rips into my wallet like a beaver does a tree limb.
I sit back inside the car and watch the truck’s gas gauge rise, as I hear the pump in the background clunking along. I actually counted the clunks…every 18 times it made that sound, it cost me $7.22. Then, to my surprise the pump clunks and all noise stops much sooner than I expected.
Hey, but the 25 gallon tank on my GMC DuraMax diesel truck was just over 3/4 full! I figured my debit card gas authorization limit, set by the gas station, had been reached so I got out of the car to re-swipe and complete the fill-up.
I looked at the pump and sure enough, I was correct. The authorization limit had been reached alright…BUT AT $100 FREAKING DOLLARS! I looked again in amazement, then told my wife to check it out. I grabbed my camera and snapped the photo below. As you can see in the photo below, I only used a little more than 20 gallons of diesel. This very same fill-up cost around $80 just two weeks ago. And this a fairly large Chevron on a well-traveled highway, near Sacramento. Not some one-pump repair shop in the sticks!
“Thank you Mr Bernanke is all that I could say.” Who else is there at which to point the finger?
We can talk about Asian and Indian growth, weak refining capacity in the US and geopolitical risk premiums all day long, but I am rate of change kind of guy. The massive rate of change in crude and gas prices are perfectly in-line with the dramatic cut in the Fed Funds Rate, weakening dollar etc. Some will say we have artificially low prices for years and now are catching up to reality. Perhaps, but again the rate of change over such a short period of time is what is significant to me and likely most consumers.
To this mortgage insider and Wall Street outsider the following are what I have noticed have had the biggest rate of change since Bernanke started to ratchet down rates at the fastest pace in history after spending months in 2007, along with Hank Paulsen, denying the problem even existed.
-dollar crashing
-crude oil and gasoline rising
-food costs rising
-mortgage loan, credit card and auto loan defaults rising
-foreclosures rising
-banks Level 2 ‘assets’, Level 3 ‘assets’ and leverage rising
-stock holder equity shrinking
-the Fed’s balance sheet shrinking
-mortgage rates rising
-home values falling
and finally, since the last shock and awe move on the day Bear Stearns collapsed…-stock prices rising of the very same handful of banks who invented the recent manifestation of structured finance that has blown up in the world’s face and that are now being rallied around by the financial press and Wall Street.
On the surface it sure looks like 300 million Americans and God knows how many billions of people globally, have been thrown under the bus to save a handful of alchemist banks who got us into this mess in the first place.
After seeing the $100 price tag for a partial fill, I actually joked about calling AAA, as whatever cost I incurred over the free towing that comes with my premium subscription maybe cheaper than the next fill-up.
Perhaps $5 is not that shocking to some, but it sure caught my attention. Different folks will have different price trigger points but I think that the $5 price tag is psychologically significant. I spent the next hour after filling up talking about how what we need to do to reduce our personal gas consumption. -Best, Mr Mortgage
ARE YOU READY!! THIS IS NEAR SACRAMENTO, CA
CLICK TO ENLARGE
May 19th, 2008 1:24 am
Is $5 a gallon typical for CA? It’s $4.20 in FL.
May 19th, 2008 1:30 am
there has been nothing typical in the past two months. This one shocked the hell out of me.
May 19th, 2008 1:31 am
In the past I never paid too much attention to the exact price but I think $5 is very significant psychologically.
May 19th, 2008 1:35 am
Thank you Arnold… thank you Bush.
Thank you for our relationships with the oil producing countries.
And thank the Fed/Bernanke for the level of support for the American dollar.
May 19th, 2008 1:55 am
While you can put some of the blame on Ben, you can also blame geology.
Why geology? Well, because the earth was not thoughtful enough to supply us with a larger amount of easy-to-get oil. Over the past 150 years, we’ve used up the easy oil, and now we’re having to go deep into the ocean, to the arctic, and boiling tar mined from open pits in venezuela and canada to extract our oil today. In the not too distant future — perhaps 5 years from now, or maybe even right now– oil production will hit a maximum, and then it will decline each year, just like it did in the US in 1972. It’s called “peak oil.”
The oil will never run out, but getting it will become more and more expensive, and the yearly production declines will interact badly with yearly worldwide demand increases and that will REALLY drive prices through the roof.
And once the american commuter realizes oil prices will not be going back down to $2/gallon, what is that going to do to the price of houses in the distant exurbs?
Dave Fairtex
May 19th, 2008 2:22 am
Hey guys, what are you complaining about??? Over here in Germany it’s much more expensive. Your $5 a gallon translate to €0.85 per liter. We pay roundabout €1.50 per liter at the gas pump. So you have a lot of room left to grow!!!
May 19th, 2008 2:30 am
Hi Mark,
Welcome to the world of Peak Oil….for an explanation of whats going on in the world of diesel fuel, see
“The peak oil crisis: diesel” by Tom Whipple
15 May 2008 by Falls Church News-Press.
http://www.energybulletin.net/44253.html
“The evidence is mounting that the U.S. might just encounter the first real crisis of the oil depletion age before the year is out.
The crisis at first will be one of spiraling prices for diesel and heating oil, followed by actual shortages here in the United States. In the last two weeks, the wholesale price of heating oil has moved up by nearly 70 cents a gallon and no end is in sight. Many observers are starting to note that what they call “a tight market for distillates” –- the industry’s term for diesel and heating oil – may be what is driving up the price of crude and consequently gasoline.”
If you want to stay current on the energy situation, I suggest you subscribe to Tom Whiiple’s weekly Peak Oil Review, free at
http://www.aspo-usa.com/index.php?option=com_content&task=blogsection&id=5&Itemi
d=45
By far, the best weekly summary on peak oil and world energy. If you think you were robbed this weekend, just wait until this summer…..got Prius?
Best Regards,
Dave
May 19th, 2008 2:31 am
And that’s why you are in Irak too. It’s the only place where extracting the stuff from the ground costs about 2$ pet barrel. The ONLY PLACE. The US dollar is seen in the Arab world as a overprinted piece of worthless paper. Same thing in Russia and China. I have a soluton for all of you. Invite Europeans and Japaneese to your country. Ask them to teach you how to have about the same GDP with half the amount. “Bye bye, American pie drove the Chevy to the levee.” Think Europe. Think Japan. Please ? Hasta luego American dream. Build TGV trains. I know.You are addicted to “humoungous McManshions” and “tank like cars”. Hope oil goes to 200$ real soon. Goldman Sachs says it will.It will be real plus for the banks and their loans.
May 19th, 2008 3:01 am
I am paying $6,4 per gallon, but thanks god, my car does 52 miles per gallon. But I am much more carefull driving lately.
Funny thing, but train is costs me twice as much as diesel.
May 19th, 2008 3:31 am
check out http://www.tampabay.com/news/article473596.ece , Hard Numbers: Why the economy’s worse than you know, shows how the govt manipulates the stats to get better Unemployment figures and lower CPI readings.
May 19th, 2008 3:41 am
Thank you Mister Greenspan also.
The fantastic dividends of financial innovations is coming to roost. Remember how Mister Greenspan was in love with them ? Ah well, a lot like the new economy bull. It takes Mother Nature 250 million years to create petroleum. Don’t forget it. Once it’s gone, we have to wait 250 million years to have the same bargain. “Twilight in the desert.” by Matt Simmons.
May 19th, 2008 5:40 am
You should pay 200$ for the same amount. And US real estate should be 50% cheaper.
May 19th, 2008 5:40 am
You should pay 300$ for the same amount of gaz.
And US real estate should be 80% cheaper.
May 19th, 2008 7:11 am
they’re paying $6.00 pg in Euroland … thats where you’re headed yankee fools
the sooner the better; I need a few more of your shrinking $$$ to pay for a few new skyscrapers
May 19th, 2008 7:39 am
One of the most boring parts of the blogosphere is listening to stereotypical Europeans bash whatever they can about America. Yeah, you suffer high gas taxes…ergo, so should we. There are innumerable reasons our ancestors left ossified Europe behind. We no more *deserve* their high gas prices then we deserve and aspire to to choke on undeodorized Euro armpits. Instead of building themselves up, they’ve resigned themselves to rooting against and ankle biting the alpha nation.
Moving on. Inflating oil prices and the predictable political currency debasement are an opportunity. Stop complaining and get long.
May 19th, 2008 7:44 am
Mr M - Yeah, after you pumped that gas I bet you didn’t want to leave!!!
I agree with your post 100% that is what I have been complaining about to my husband for the past 8 months. We were responsible with our finances, no heloc’s here, conservative debt to income ratio when we purchased, etc. and now that I only bought the 500k house, and not the 800k house that I am sure would have been nice at the time, I feel like we (all of us who are responsible) are being punished. I keep asking myself what is going to happen to the many who were getting by now that the price of everything is going up (except real estate, 401k value) - will those people start defaulting too - it would have to be, no? It could get really nasty out there, I can only hope that if we prepare enough, when that tide goes out, I’ll still have my bathing suit! arg.
thanks for posts, as always
EA
May 19th, 2008 8:11 am
Well, unfortunately in this case, I actually agree with the euro folk. I would really like it if the US used as much gasoline per capita as Europe. Our country would be stronger as a result. We would have a better balance of trade, because our oil imports would be down by perhaps 50%. Surely that’s not a bad thing? We can blame extended suburbs and spread out infrastructure, but holy crap, don’t we have to take responsibility for the monster cars we have decided to buy?
A lot of chickens are coming home to roost all at one time. Crazy real estate markets, our love affair with big cars, our low mileage standards, as well as our low gas taxes that did not encourage conservation are now biting us in the ass all at once. If other people in other countries are have a little attitude in pointing it out, it doesn’t mean they are wrong.
May 19th, 2008 10:50 am
this thread is getting good! Thanks everyone. I want to call ‘bullsh**’ on a couple of posts here but have to run out for a few hours. Be right back.
May 19th, 2008 11:16 am
The fact of the matter is, we could already use another 5 million barrels a day, and that 5 million is only going to increase and with it the price.
The easy ride is over for you. Welcome America to the rest of the world.
May 19th, 2008 11:31 am
All inflation is monetary inflation, according to some estimates M3 supply of money, the broadest measure of money,increased by 16.7% annually according to shadowstats.com so there’s 17% more dollars than there were in the financial system last year. More dollars, same number of goods and services, you do the math - higher prices! And instead of moving into housing like the FED hoped it would do, its going into commodities. Apart from oil, most commodities are up strongly over the last year.
May 19th, 2008 11:48 am
Absolutely viv. Check the M3. I wonder why they scrapped the M3. I know why. Because people in charge in Washington are criminals. M3 is the principal culprit. “Inflate or die” should be changed to “Inflate and die.” People buying US treasury bonds are really stupid.
May 19th, 2008 12:28 pm
Duramax diesel truck huh? I’m guessing you needed that substantial truck because it was towing a fairly substantial boat right? A boat that used a pretty penny’s worth of gasoline right?
Please don’t be offended, I like to hear that people are doing well enough to enjoy life, and spending a day of recreation on a boat on a lake in the California Sierras is certainly something to be celebrated and appreciated. Hell, I’d like to join you.
Unfortunately, since your days activity was so desireable it is also something that is going to have costs associated with it. As more of the third world moves up they will begin to compete for everything. Oh, they may not actually be visible on your lake for quite some time, but indirectly they are there already and they are competing for what we in the US have long taken for granted.
The only way we continue to enjoy what we’ve had for so long? Get productive. I don’t like what the Fed has done either, but ultimately it is a failure of the entire economy to take advantage of cheap money to actually produce things of value that has left us where we are today.
May 19th, 2008 12:40 pm
Yankee Doodle Fools: I have ordered our Supreme Excellency of the Saudi Royales to deny Señora Bush more oil, much to his chagrin.
Our plan has been, all along, to sell you that black greasy shit beneath our desert sands, that goes up in smoke, in exchange for your shrinking $$$$’s. Fortunately for us, your real estate has been shrinking ever faster, enabling us to buy up parcels of land for petro$$’s, effecting a take over of your country without a shot being fired, the Saudi Way.
Yankee fools, you lose.
May 19th, 2008 12:42 pm
Our European friends should remember that their fuel prices are high because of government policy (taxes). I’m not casting judgement here, there certainly are some benefits to forcing conservation, but we Americans like to live loose, free and pay whatever consequence that arises when price shocks hit our economy. Pigs, yes. But, happy pigs we are.
PS MortgageMans boat probably gets about 2 miles per gallon.
May 19th, 2008 12:44 pm
http://www.shadowstats.com/
Here is what the FED, that criminal organization, has done. Cheap money does not work. It kills the real economy and it renders hard work, paying your bills and your debts useless.
500 billion of NINJA loans. Yeah easy money for the mafia and the mob at JP Morgan.Gangster culture is all mighty at the FED. Most people don’t even know why prices are exploding. Uncontrolled easy money. Europe and Japan consume 50% less oil, and nobody is dead.
May 19th, 2008 1:32 pm
Mr Mortgage great youtube! Great blog!
Fairtex: peak oil is close.
God bless!
May 19th, 2008 2:14 pm
The EU has a larger GDP than the USA
the European Union is the largest exporter in the world, it’s ahead of the United States and China. Europe’s largest exporter is Germany,which
sells more goods abroad than either the US or China.
Europe is the largest internal market in the world.
61 of the world’s largest 140 companies are based
there.It dominates in banking and insurance, aerospace with Airbus, engineering, construction, and the chemical and food sectors.
America leads in some pretty big industries, pharmaceuticals, automobile manufacturing, software and telecoms.
The EU has Universal Health Care. (The average EU citizen lives a year longer.
They get more weeks of paid leave per year than americans.
The Euro is 50% stronger in the last 5 years.
All this and the average gas price would leave the average american fuming at 6.5 - 7.5 dollars per gallon i think, hmmm, higher tax on gas, means that we use our oil more efficiently and invest it in healthcare and education.
That said there are weak spots in the EU market, most notably spain and italy, while the french love to complain about their apparent loss of purchasing power, but the rest seem to be coping quite well.
May 19th, 2008 2:27 pm
hey mr mortgage and fellow truth seekers thought you might find this link interesting,
http://www.ajc.com/metro/content/metro/atlanta/stories/2008/05/11/assess_0512.html Homes going for 10,000 dollars, thats right 10,000!!
May 19th, 2008 2:28 pm
I feel your pain. I watched a program last night on CNN ‘We Were Warned: Out Of Gas’. It’s about the gas crisis. It’s not gonna get any better and we have to adapt to these changes. What else is next???
May 19th, 2008 3:55 pm
Because they can…
May 19th, 2008 3:59 pm
Hey Viv- you all got some lazy arse Realtors down there if they can’t get more than 10K for any liveable home. Worse yet a 700K house 2 years ago had to drop to 51K?
Where do I sign?
May 19th, 2008 4:41 pm
First you have to get rid of the pharmaceutical merchants ? It’s 10,000$ because the neighbors operate in the vicinity nice things like drug trafficking and prostitution. It’s never good for real estate values.
I read the article also on goldseek site.
http://www.thetruthaboutmortgage.com/most-appraisers-asked-to-inflate-home-values/
What’s real funny is how the governments are litterally screwed with vanishing tax revenues and assessors don’t what to do. It’s soo funny!
Trying to keep taxing as if nothing happened.
Expect a lot of state and towns going bankrupt.
May 19th, 2008 4:48 pm
http://news.goldseek.com/LewRockwell/1211137695.php
Tax assessors and appraisers are really in deep sh.t .
I would be interesting to know what states and what towns are most vulnerable to bankruptcy.
California is borrowing another 50 billion. Will California go bankrupt ? Eventually much much higher taxes and deep deep deep spending cuts are coming.
May 19th, 2008 6:03 pm
We pay about 4.20-4.30 for diesel here in Tucson and 3.52 for gasoline. These are about the lowest prices in the country right now. Chevron is more expensive than say gas at Circle K because it is higher quality due to (a) cleaning agent(s).
May 19th, 2008 6:33 pm
The city of Visalia, CA already filed bankruptcy.
May 19th, 2008 9:54 pm
What an idea to drive a big thing like that!! Especially for a consultant! Where is the use? Sorry for being a little mean, but your respect to me has gone down.
Don’t complain about gas prices. Just go look at other countries where gas is twice as expensive because of big taxes. Result? Nobody drives big polluting cars like yours, except the very rich, and much less money is going to oil states. You’re blaming the FED but do you think you’re helping the dollar with your truck?
You should drive a smaller vehicule. As mortgages, your truck is probably not worth very much anymore anyway.
May 19th, 2008 10:02 pm
Marc,
M3 is credit, not money. You buy a CD or a share of a moneymarket fun, M3’s going up. Guess what people do in a recession.
Think about it. Do you think prices go up when you use cash on your checking account to buy a CD?
May 19th, 2008 10:10 pm
1. Gas is still very cheap in US. Average cable bill is what, about $100, right? What about cell phone bill, about $60, I think. Eating out? Buying new clothes because the ones you have aren’t very new? Etc.
Point is, that all this stuff above is Not Necessary, while gas is necessary.
Therefore, if you haven’t cut you unnecessary spending, it is ridiculous to bitch about gas being too expensive. It is not, it’s just that you need your money to pay for useless discretionary stuff, that you aren’t working productively enough to be getting anyway.
2. Gas at $4 per gallon is still only 1/225 of an ounce of gold per gallon at $900 per troy ounce. This means that the gas is about $0.92 per gallon in pre - Roosevelt dollars, which were ordained by the constitution for Americans to use. In 1920, gasoline cost 30 cents per gallon. So, the modern methods of production and capitalization have reduced the price three-fold. If you are using Gold money you are buying gas for 10 cents a gallon and that’s three times cheaper than in 1920. What’s to bitch about? The fact that we use and accept unconstitutional paper from FED instead of money is unamerican, unpatriotic and deserves a punishment for treason far worse than being overcharged.
3. All you people who want to reduce american gas consumption are just going to get progressively higher prices. This is because the biggest buyer makes the prices. All you whines are going to change is you are going to drive tiny tin-cans and your wives are going to be made disabled in every stupid fender-bender, all the while being charged more and more, because collectively America will buy less and less.
4. There was never a peak oil in US. O.K.? Get over this propaganda. What had happened was many Americans stopped being Americans and started to look in other people pockets, and were saying that gas companies make windfall profits. This gave the government gangsters a reason to raise the taxation on refinement and production profits. The result? Oil companies now buy gas from foreign producer for as cheap as before, then transport it to US under a name of offshore corporation, then sell it to US refineries for multiple of the costs. This is what they had to do to keep their money from being stolen by commies in USA. This is why there is no production in USA, forget you peak-oil stories, those are for democrats and other idiots.
May 19th, 2008 10:14 pm
-correction: “This means that the gas is about $0.92 per gallon”.
The correct number is: $0.092, not $0.92! My bad, just a typo.
May 19th, 2008 10:39 pm
I am an appraiser here in GA and the case refrenced above is from the worst fraud laden zip code in the US. There are several more just like it. It was caused when a flood of straw buyers were used to flip homes and most of these houses were less than 5 years old…never lived in …and sometimes flipped multiple times. Yes, times will be tough as all states were not budgeting for the loss in revenues from real estate related transactions and tax revenue. The Gov’t is broke and will not be able to supply states the needed funds to operate the public services needed. Most sales in the metro Atl counties are off 20-30% year over year in sales volume and prices are down roughly 5-10%. The budget shortfall will effect teacher, firemen, public works, police, etc. going forward. I read that 15% of all men 25-54 are not presently employed. This does not bode well for families or the housing market. It is hard as hell being an appraiser. Everyone thinks you are a crook. Some of us have been losing clients for years because we would not trade our integrity for a dollar. I would starve before I have to lie to make a living. I was hoping that quality and integrity would make a comeback in the lending industry but those hopes die a little more each passing day as it looks like the FED/Gov’t is more concerned about Wall Street than Main Street. I hope there is a Country left to pass on to my children. It is not looking to promising at this point. What will it take to right the ship now World War 3?
May 20th, 2008 12:12 am
Not to worry - I travelled 93 miles this weekend for 12 cents of electricity on my new electic bicycle. And had a blast. I’ve dubbed my bike “Convenient Truth”…give it a try, you will never go back to a regular bicycle. AWESOME!
May 20th, 2008 2:18 am
Don’t have a car, haven’t driven in about 10 yrs. just waiting for my price controlled rationing cards. Let the bidding begin.
May 20th, 2008 4:15 am
I pay 9 USD a gallon for diesel here in Sweden. Luckily we don’t drive monster trucks and I am sure you guys won’t drive it either in a short while. Look at BMW 118d and you don’t have to worry so much about fuel consumption.
May 20th, 2008 6:00 am
Mr Ravias makes some interesting points. I agree with some of them - that gas is actually fairly cheap respective to the benefits we get for it, and that reducing American consumption will not reduce overall prices, and so on.
(I must confess that a fill costing $100 is still pretty appalling at a visceral level, however)
His colorful statements about peak oil, gangsters, idiots, and commies caused me to read up on the WPT (windfall profit tax). Could it be true that we shot ourselves in the foot? (or rather, we let idiots control our country, and they allowed the commies and gangsters to shoot us in the foot?)
Here’s what I found. Nixon first implemented wage & price controls in 1971 in an attempt to control inflation. They were largely dropped in 1973, except for price controls on oil extracted in the US which remained in place until 1980. Then, the WPT was passed and signed by Carter, and after that up to the end of the Reagan years the US had a per-barrel excise tax in place through 1988. The imposition of price controls was coincident with the peak of oil production in the US, which was in 1971.
But it has been 21 years since Reagan and the congress repealed the WPT in 1988. EIA oil production data for those most recent 21 years do not show any increase in oil production, as one might expect if “commies and gangsters” were the dominant factor causing US oil production to peak in 1971. In fact, production has declined every year since 1991. The US produced around 9.5 MBPD in 1970, 7.4 MBPD in 1991, and we produce around 5.1 MBPD today.
So after reading up on it, while not as colorful an explanation as gangsters & commies, the geology-based peak oil theory still seems to me like the dominant influence on the drop in oil production in the US from 1971 through today.
May 20th, 2008 7:44 am
One more thing. I didn’t read Mr Mortgage’s post clearly enough. He was observing not that gas was at $5, but that it went from (say) $3.50 to $5 very, very rapidly. And he was pointing the finger at Ben Bernanke for that rapid change, because of his recent actions.
Certainly, geological effects of oil supply will only act slowly over time - so the actual effects of alleged peak oil certainly can’t be to blame for this rapid change. And there have been no major physical oil supply-related disasters, shortages, etc.
So it must be a change in human thinking that is the cause. I agree with his Bernanke factors having some impact, but I feel they are secondary, not primary.
I think the primary reason for $5 gas is a recent, rapid movement towards a common vision among oil industry analysts of near term oil supply issues. Goldman Sachs issued its $200 oil price target, OPEC spokesmen talk openly of $200 oil, and even Daniel Yergin (usually an “all will be well soon” oil industry analyst) sees nothing standing between us and $150 oil.
This recent and unusual agreement among the analysts and major players have spooked the oil traders, and so prices go up and up. I get the feeling that only some dramatic fundamental good news on either the supply or the demand side will derail this train.
May 20th, 2008 10:27 am
And the BLS doesn’t help of course!
http://ftalphaville.ft.com/blog/2008/05/20/13182/real-on-the-road-us-inflation/
May 20th, 2008 11:54 am
Mr. Mortgage
Stop crying and do something about it. I’m tired of lazy Americans just crying. Ride your bike. Think about where you live compared to where you work. Stop wasting energy and water. Look at your consumption of all resources. Stop crying, all of you. Stop shopping at stores that are exploiting everyone and selling garbage. Think about if you really need or just want what you are buying. Don’t buy into the marketer’s propaganda. It’s their job to make you think you need to buy their garbage. The problem is that America is a throw away society and Americans have no ability to see how their own actions put them is the position they are in. Stop crying and do something about it. Use your brains not your credit cards.
May 20th, 2008 12:50 pm
Mr. Mortgage,
If you can’t beat ‘em, join ‘em. That’s what I did the last time gas prices spiked. I bought a ton of Chevron stock and it was the best investment I ever made. I wish I had sold my house in 2006 and bought 4000 shares of Chevron stock. I would be on easy street right now instead of upside down.
P.S. Thanks for the $100 contribution. Coincidentally, Chevron stock just crossed the $100/share threshold last week.
Sharkee
May 20th, 2008 1:11 pm
Yeah yeah. M3 is money.
Have you seen the PPI numbers today ?
Very funny indeed. Inflation is eating the USA alive. You are not finished being robbed and screwed by your stinking and corrupt politicians and the mobsters from Lehman Brothers and company. Congress just voted a 300 billion pork barrel package supposedly to “help” the poor. The poor boys and girls from Lehman Brothers.
May 20th, 2008 1:28 pm
Dave Fairtex,
Geology (the version bought and paid for by oil companies) has been telling us that the planet is running out of oil in 30 years ever since the 70’s; not 1970’s but 1870’s! before gasoline automobile was invented, and the primary use of petroleum was kerosene lamp oil; gasoline was dumped as by-product back then. It’s all just propaganda propping up oil prices. Otherwise, given oil companies’ capital structure of very high fixed capital cost and very low variable cost, they’d all be perennial money losers just like airlines. Oil price stabilization tax (like Europe has) and the new global warming tax are just the politicians wanting a larger slice of the oil profit.
Gasoline cost about 30 cents in 1920, and a quarter dollar coin (25 cents) from that time (and before 1965) would be worth about $3 due to its 90% silver content. So $3.60 a gallon for regular gasoline is no real price increase at all, for 88 years! if you use the correct tokens of exchange. What we see in “dollar prices” is nothing more than the debasement of the paper dollar itself. So admin is entirely correct in blaming the inflation on the irresponsible money printing by the FED.
May 20th, 2008 3:33 pm
Hi, Mr Mortgage
A GMC DuraMax is indeed a 6.6 liter Diesel Monster. A real survival truck.
How many miles do you drive with 1 Gallon.
The 2007 version looks “by the way” great.
http://alternativefuels.about.com/od/2007dieselvehicles/ig/2007-GMC-Sierra-/
You can always convert it to a PPO Truck. Driving on Pure Planting Oil as a last resort when conventional GAZ has gone… But you’re not alone then.
Wim from the Netherlands where diesel costs 1.46 euro a liter. Thats 5.52 euro a gallon. This converted in usd will cost me a lousy 8.66 usd a gallon
So if prices in the USA double you still have cheap GAZ
They only way to stall prices is consume less….
May 20th, 2008 5:12 pm
For all of you on the “Religious Left”…than you Woodstock Hippies for no drilling, no nuclear, no refineries, no nothing except “Organic Cum-Bai-Yah”! Not in my back yard. Well at least they can travel in their VW Bus, smoke dope, and live of of daddies…aka…Professor at one of America’s Academies. Let’s all become hunter-gatheries and go Green.
May 20th, 2008 5:25 pm
I totally sympathize about the rude awakening at the pump. I had a shocker too when I last filled up my Camry. I’m used to it costing $45 every 2.5 weeks, but this time it cost me $57. I was doubly concerned, because:
1)my husband and I have a definite gas monthly gas budget that we keep to
2)it was only mid month
3) we didn’t have enough left for the rest of the month to completely fill even my husband’s small gas-stingy car
4)We do most of our travel in my husband’s car
5)My husband bikes to work 2/5 days of the week
5)I’m off of school right now so I haven’t driven as much
We have started looking quite seriously at motorscooters.
In the meantime, I’m trying to combine a lot more errands and I’m getting really reluctant to drive distances.
I also suspect that the current inflation of gas prices can be attributed to the mortgage crisis. When our whole nation (or a higher number than ever before) starts defaulting on loans, it would be perfectly understandable if other nations didn’t want to loan to us as much and wouldn’t trust our money. If they don’t trust our money, then it isn’t worth as much. If it isn’t worth as much, it takes more of it to buy products from other nations.
Furthermore, I really wonder just how smart it really it is for banks to tap into the fed all the time. It seems like it is only a matter of time before the fed goes bust too.
I remember about five years ago when there were a number of news stories making the case that Americans were borrowing to support their lifestyle and living beyond their means. It is beginning to seem to me as if the banks are doing the same. The insolvency is moving from the individual level further up the organizational level. If it isn’t stopped somewhere, it will continue to spread higher.
May 20th, 2008 6:16 pm
Consume less. That’s unamerican !
May 20th, 2008 6:24 pm
T. Boone Pickins sees 150$ oil.
Here we come with nasty nasty nasty stagflation. US PPI is exploding too. 0,6% in one single month. Not good for GM, not good for GMAC, not good for all these suckers in 5 and 10 year bonds, and not good for real estate.
May 21st, 2008 7:11 am
Get used to it Mr. Mortgage.
This morning the futures contrats on oil 2016 !!!!!!!!!
was quoted at 140$ !!!!!!!!!!!!!
The market is expecting high prices for the next 8 years !
8 years !
Not good for McManshions. Not good for anything that sucks a lot of energy for heating or air condionning.
Not good for US treasuries. Not good for the dollar.
May 21st, 2008 7:45 am
Index data delayed 15 min.
DJIA 12828.7 -199.48
NASDAQ 2492.26 -23.83
NIKKEI 13,926.30 -233.79
RUSSELL 735.64 -2.81
NYSE 9536.01 -66.77
TSX 15047.3 63.14
USD 72.04 -0.42
Crude Oil 130.10 +1.12
And what would happen if Hugo Chavez or Amahijihzad coordonate a smallish cut of let’s say 2 million barrels ?
Or Nigeria blows up. Or Irak ? Sell your big cars.
The big McManshions that cost 5,000$ per year to heat or cool are not finished crashing. It’s finished. Learn to be a little bit more japaneese and european. The same goes for us in Canada. We are real energy hogs too. We have a lot oil, but it’s killing us.
May 21st, 2008 9:43 am
Mr. Morgage, that wouldnt be lake Tahoe would it?
What’s your take on the recreation RE market around Tahoe or CA in general?
I’d guess people will give up their cabin before their primary house…
- Anders
BTW: $10/g in Norway, and we produce 2m barrels/day!
May 21st, 2008 11:25 am
[...] Mr Mortgage Was Robbed ($4.949/gal) This Weekend - You’re Next [...]
May 21st, 2008 11:38 am
Here is a Suadi Arabian joke for you.
Oil Price average nect 5 years $100/Bl, $125/Bl, $150/Bl, $65/Bl, $100 Bl.
The truth in the humor is that OPEC will keep prices high and when consumers and businesses cut back and conserve they cut the price where conservation costs $$ then slowly inflate the price.
I do not think the real threat to world stabilty is peak oil but I do think that there is a real threat to the world petro economy if there is a tech break through with battery technology and solar power tech and oil marketes collapse due to lack of demand in the next 20 years.
May 21st, 2008 11:47 am
that wasnt Lake tahoe, it was a lake near Grass Valley/Nevada City. I knew gas was going up but this jump was insane.
May 22nd, 2008 8:40 am
By the way, hurricane season has not even arrived.
I remenber Katrina. If you were China and had all this stupid overprinted US funny money in your reserves, what would you do if you are really intelligent ?
Buy some gold, buy some copper, zinc, lead, corn, soja, and yes buy some oil etc… If you were a foreigner investing in US treasuries, or the “wonderful” US racket-market, you would have been robbed repeatedly. It’s not my case. The only thing I am doing in the US markets is shorting your corrupt and wrotten banks.
May 26th, 2008 2:21 pm
If you are headed up HWY 49, it is generally cheaper to fill up at the Flyers in Auburn, or at the Arco station when leaving Auburn headed towards GV/NC. If you are towing a boat, the Arco would likely be the easier to deal with. Those are my usual filling holes.
June 1st, 2008 3:49 pm
[...] It has been two weeks since I got hit upside the head with a whopping $100 partial diesel full-up and quite frankly forgot about the whole incident. Link to 5/19 Post. [...]