World Finance Watch

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Zoomerz

Member
Messages
218
Re: World Finance Watch

This is crap! I'm paying today for something that may happen in 6 months! I'm paying for gasoline at a rate of $100/brl of oil that it might have cost them at the time it was refined at $35/brl of oil! When you get into this cycle, it can never go down! And I flunked economics (obviously), but I do run a business. I just know you can never take a loss and stay in business. Greed? I call this armed robbery at the pumps. If I told my clients that I have changed my per/hr rate from $13 to $39 because I'm anticipating a price hike on Windex, Scrubbing Bubbles and vaccuum cleaner bags, I would lose clients!
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Sue, although we do have (or are supposed to have) an *emergency* 90 day reserve, the gas we're using today came from crude oil imported several months ago. The price increases we're seeing today are "supply line" or "trading" increases that have occurred since this oil was originally shipped from it's orgination point. I found a decent article (below) that describes the supply-line process and how it affects prices at the pump. Although I think this trading "machine" is a bunch of bunk, the process itself is accurate. See what you think.

http://www.macnewsworld.com/story/34919.html

Notice the way he describes how prices are set:

In addition, Banker observed that in turbulent times about one-third of the cost of a gallon is driven by trading considerations -- or what traders believe will happen in the future -- and two-thirds by the normal costs and margins of the supply chain. During less turbulent times, with a more predictable future, supply and demand trading considerations become much less influential on price, he said.
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Quite a convenient way to manipulate prices, wouldn't you say?

So in effect, the prices we're paying today reflect the supply-line "trading" that is constantly occurring while the oil/gas is on it's way to the pump. This explains why within days of some "negative" event or information, the next trade made along the supply chain will reflect the increase/decrease. Sounds to me like we need to have Walmart get into the gas business.....

Z-
 
StarLord

StarLord

Senior Member
Messages
3,187
Re: World Finance Watch

Sound excuses for being jerked around. Regardless of the prices, the people that have to purchase are the ones that get hit the worst. The oils companies rake in monstrous profits what ever the price is. I do not trust them.

Does anyone here trust the Oil companies to look out for our best interests? After all they have at their back and call several very good excuses to rape and pillage when it comes to pricing.

And, doesn't it sound so very logical and convincing?

How many united states patents do the oil companies own when it comes to carburator systems that enable 50 to 75 mpg? They exist. They are in use in Europe per what Grayson has posted?

Shouldn't they be passing out lubricants with each fill up??????
 
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CaryP

Senior Member
Messages
1,432
Re: World Finance Watch

Hey, StarLord, I'm on your side. Big oil doesn't have our best interest in mind at all. They have theirs. And you're right, you come up with gas saving technology and they will pay just about any price to get it and keep. But the jig is up to some extent. As supplies of fossil fuel dwindle away, Big Oil will lose most of its customer base as people will be forced to find other means energy. Picture the equivalent of $10/gal. gasoline in today's dollars. A lot of customers will just go away.

Cary
 
Grayson

Grayson

Conspiracy Cafe
Messages
1,117
Re: World Finance Watch

<div class='quotetop'>QUOTE(\"CaryP\")</div>
Hey, StarLord, I'm on your side. Big oil doesn't have our best interest in mind at all. They have theirs. And you're right, you come up with gas saving technology and they will pay just about any price to get it and keep. But the jig is up to some extent. As supplies of fossil fuel dwindle away, Big Oil will lose most of its customer base as people will be forced to find other means energy. Picture the equivalent of $10/gal. gasoline in today's dollars. A lot of customers will just go away.

Cary[/b]
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We pay roughly $9:00usd for Petrol/gas and diesel. LPG Gas is roughly half that.

Yet we are still a nett producer and refiner to home supplies, though not enough in quantity. We buy from abroad and suffer the vagaries of the International price as well.

Our Government taxes oil as it is driven up to the rig, taxes it again as it is pumped onto a tanker, or through a landline, taxes it by the barrel for the refiery to use it and then taxes the refined product. Without these taxes, we could buy the homegrown stuff for a dollar a gallon.

And still demand grows, the number of large engined BMW', Mercedes, Lexus, Jaguars, Land-Rovers, misc 4X4's, Hummvies and large people carriers is on the increase, consumption rises.

The Lord of the Pacific Rim and the Nations of the Indian Ocean have awoken. They consume our needed materiel in the form of cement/concrete, copper, glass, oil and money at truly prodigious rates to form economies to call their own, based on consumer driven and tertiary industry services deployed in the Westeren World... then they take those jobs as well.

Our profiteering Lords of Business gleefully sanction this booming bubble of activity and profits and why not, because when it bursts over here, we'll need to rebuild and restructure to service the wealthy East as they do now. How can the Lords of Industry lose out?
 
Z

Zoomerz

Member
Messages
218
Re: World Finance Watch

<div class='quotetop'>QUOTE(\"Grayson\")</div>
We pay roughly $9:00usd for Petrol/gas and diesel. LPG Gas is roughly half that.[/b]
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Wow! Just for comparison's sake, what is the *driving environment* like there? I mean, do most people have to drive to and from work? Or is there adequate mass transit options available that allow personal vehicles to be used more for pleasure or recreational purposes?

And still demand grows, the number of large engined BMW', Mercedes, Lexus, Jaguars, Land-Rovers, misc 4X4's, Hummvies and large people carriers is on the increase, consumption rises.
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Here in the U.S. the truck/rv market is flattening like a pancake. Dealers are having trouble selling them even with huge incentives and rebates.

Traditionally, trucks and rv's have been a fairly stable market here, resulting in very good resale values. I fear that is changing, and feel sorry for those with high premiums on their specialty vehicles. They're going to be hardest hit at selling time.

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CaryP

Senior Member
Messages
1,432
Re: World Finance Watch

I've got a few posts for the thread. This first one is an article written by Paul Volcker. For those of you who don't remember Volcker, he was Greenspan's predecessor, chairing the Fed from 1979 to 1987. Volcker was hated in his first few years of tenure because he raised interest rates to curb inflation. The Fed's Discount Rate was pushed north of 20% under Volcker's guidance. A lot of businesses went bankrupt because of the high interest costs associated with this move. It was also the last few years of the secular bear market that lasted from 1966 into 1982. Volcker did what was "right" for the economy in the long run. Greenspan is focused only on the short run, and has shown a marked unwillingness to take politically unpopular moves at the Fed. Okay, I'll shut up (soon, very soon). But when Paul Volcker describes the U.S. economy as "on thin ice," it generally pays to sit up and take notice. No, he's not calling for the end of civilisation, but he does talk about the systemic risks that are out there, more than any of the numbskulls we have at the Fed now.

Cary

http://www.washingtonpost.com/ac2/wp-dyn/A...anguage=printer

<a href='http://www.washingtonpost.com/' target='_blank'><span style='font-family:helvetica,arial'>By Paul A. Volcker

Sunday, April 10, 2005; Page B07 ? ? ?

? ? ? ?

?The U.S. expansion appears on track. Europe and Japan may lack exuberance, but their economies are at least on the plus side. China and India -- with close to 40 percent of the world's population -- have sustained growth at rates that not so long ago would have seemed, if not impossible, highly improbable.

? Yet, under the placid surface, there are disturbing trends: huge imbalances, disequilibria, risks -- call them what you will. Altogether the circumstances seem to me as dangerous and intractable as any I can remember, and I can remember quite a lot. What really concerns me is that there seems to be so little willingness or capacity to do much about it.

? We sit here absorbed in a debate about how to maintain Social Security -- and, more important, Medicare -- when the baby boomers retire. But right now, those same boomers are spending like there's no tomorrow. If we can believe the numbers, personal savings in the United States have practically disappeared.

? To be sure, businesses have begun to rebuild their financial reserves. But in the space of a few years, the federal deficit has come to offset that source of national savings.

? We are buying a lot of housing at rising prices, but home ownership has become a vehicle for borrowing as much as a source of financial security. As a nation we are consuming and investing about 6 percent more than we are producing.

? What holds it all together is a massive and growing flow of capital from abroad, running to more than $2 billion every working day, and growing. There is no sense of strain. As a nation we don't consciously borrow or beg. We aren't even offering attractive interest rates, nor do we have to offer our creditors protection against the risk of a declining dollar.

? Most of the time, it has been private capital that has freely flowed into our markets from abroad -- where better to invest in an uncertain world, the refrain has gone, than the United States?

?More recently, we've become more dependent on foreign central banks, particularly in China and Japan and elsewhere in East Asia.

?It's all quite comfortable for us. We fill our shops and our garages with goods from abroad, and the competition has been a powerful restraint on our internal prices. It's surely helped keep interest rates exceptionally low despite our vanishing savings and rapid growth.

?And it's comfortable for our trading partners and for those supplying the capital. Some, such as China, depend heavily on our expanding domestic markets. And for the most part, the central banks of the emerging world have been willing to hold more and more dollars, which are, after all, the closest thing the world has to a truly international currency.

? The difficulty is that this seemingly comfortable pattern can't go on indefinitely. I don't know of any country that has managed to consume and invest 6 percent more than it produces for long. The United States is absorbing about 80 percent of the net flow of international capital. And at some point, both central banks and private institutions will have their fill of dollars.

? I don't know whether change will come with a bang or a whimper, whether sooner or later. But as things stand, it is more likely than not that it will be financial crises rather than policy foresight that will force the change.

? It's not that it is so difficult intellectually to set out a scenario for a \"soft landing\" and sustained growth. There is a wide area of agreement among establishment economists about a textbook pretty picture: China and other continental Asian economies should permit and encourage a substantial exchange rate appreciation against the dollar. Japan and Europe should work promptly and aggressively toward domestic stimulus and deal more effectively and speedily with structural obstacles to growth. And the United States, by some combination of measures, should forcibly increase its rate of internal saving, thereby reducing its import demand.

? But can we, with any degree of confidence today, look forward to any one of these policies being put in place any time soon, much less a combination of all?

? The answer is no. So I think we are skating on increasingly thin ice. On the present trajectory, the deficits and imbalances will increase. At some point, the sense of confidence in capital markets that today so benignly supports the flow of funds to the United States and the growing world economy could fade. Then some event, or combination of events, could come along to disturb markets, with damaging volatility in both exchange markets and interest rates. We had a taste of that in the stagflation of the 1970s -- a volatile and depressed dollar, inflationary pressures, a sudden increase in interest rates and a couple of big recessions.

? The clear lesson I draw is that there is a high premium on doing what we can to minimize the risks and to ensure that there is time for orderly adjustment. I'm not suggesting anything unorthodox or arcane. What is required is a willingness to act now -- and next year, and the following year, and to act even when, on the surface, everything seems so placid and favorable.

? What I am talking about really boils down to the oldest lesson of economic policy: a strong sense of monetary and fiscal discipline. This is not a time for ideological intransigence and partisan posturing on the budget at the expense of the deficit rising still higher. Surely we would all be better off if other countries did their part. But their failures must not deflect us from what we can do, in our own self-interest.

? A wise observer of the economic scene once commented that \"what can be left to later, usually is -- and then, alas, it's too late.\" I don't want to let that stand as the epitaph of what has been an unparalleled period of success for the American economy and of enormous potential for the world at large.

? The writer was chairman of the Federal Reserve from 1979 to 1987. This article is adapted from a speech in February at an economic summit sponsored by the Stanford Institute for Economic Policy Research.

? ? ? ? ? ? ? ?? 2005 The Washington Post Company
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C

CaryP

Senior Member
Messages
1,432
Re: World Finance Watch

Here's a piece on the new record trade deficit for Feb. We as a country borrow too much, produce too little, and don't save for the future. Problems ahead.

Cary

http://www.financialsense.com/editorials/h.../2005/0412.html


[font=times new roman, times]<img src=\'http://www.financialsense.com/images/icons/storyend.gif\' border=\'0\' alt=\'user posted image\'>
? ? ? ?? 2005 Michael W. Hodges[/font]
[/center]
?
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Z

Zoomerz

Member
Messages
218
Re: World Finance Watch

<div class='quotetop'>QUOTE(\"CaryP\")</div>
washingtonpost.com
An Economy On Thin Ice[/b]
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Fantastic post Cary...Might be some false hope thrown in there (MHO). If I didn't believe this was all by design, I might totally agree with him.

tick...tick....and the flow of "globally competetive wage labor" continues to flow into this country, creating a rather large constituency that's unlikely to complain much....

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