SWB: Alan B. Rowley II - Success Coach - ECoaching - Email Coaching

Gas Prices Costing Us Indirectly

Between my little Saturn and my 3 mile commute, the gas prices aren't having much of a direct effect on me.  I drive to work.  I drive home.  Once a week, we go get groceries. 

That's where we are feeling it.  Not feeling it as in, how are we going to eat?  More of just an annoyance at this point although I'm not looking forward to seeing how high prices are going to go.

I recently read an article that stated that while healthy foods are rising in price, junk food is going down in price.  That's going to lead to more health problems for a lot of people, especially those that are already living paycheck to paycheck.

Exactly the same ones that can't afford health problems.

We are entering a new era which is frightening but at the same time exciting.  What is life going to be like when the violence subsides and the new system is in place?

McCain want to suspend gas taxes for the summer

From Memorial Day until Labor Day, McCain would like to save motorists 18 cents in Federal taxes. 

Here's a guy who openly plans on trying to continue the United States World Empire which currently costs us about a trillion dollars a year and he wants to cut taxes to save us a few cents a gallon at the pump.

As is the norm these days, the government will make up the difference by borrowing the money from China or the Federal Reserve, which ultimately is going to cost us our Republic.

People are going to wake up to the point that these little games that politicians play to make it *seem* like they are helping, are just for looks and actually make the situation worse. 

At least, I hope people wake up.  So help me Fed, people, take the red pill.

Oil vs. Gas

It is possible that oil prices will drop well below $100 a barrel.  It's not good news though.  For that to happen, the entire stock market would have to crash.

My guess is that gas prices won't go down proportional with oil prices. 

Oil companies take in record profits and I think they're going to continue to take in as much as possible.

Part of this is the declining value of the dollar.  Of course, revenues are going to go up when the dollar goes down.  It takes more of these less valuable dollars to buy the same amount of gas. 

In addition, the oil companies know that oil is on the decline.  Time to milk it for what it's worth before people make the change to some other energy source.

Oil Almost $106 a Barrel

The dollar hit a new low this week.  Why should this week be any different than the last few dozen.  OPEC won't increase output.  Chavez is threatening to go to war with Colombia and the US will undoubtedly be pulled in on Colombia's side.  Old Media is still pushing the Iranian nukeler threat.  Iran finally got their oil bourse up and running.  The stock market is crashing but oil is going up so investors will continue to drive up the cost of oil, gold, and silver.

Tia and I were talking a couple of days ago about what life would be like when gas is $4.00 a gallon.  Grocery prices are going to go up obviously and that won't be fun.

As far as driving goes though, we probably won't feel too much.  I figured it up the other day and if I didn't do much driving outside of commuting (a lifestyle I already live), I could probably drive to work and back for two months on a tank of gas.  At $4.00 a gallon, it will take me about $40.00 to fill the tank.  I haven't figured up how long Tia could drive on a tank of gas but it would probably be more than me even though my car gets better gas mileage because her workplace is much closer.

We already shop by internet when we can.  Shipping prices will be going up but it will still be cheaper than putting gas in a car.

We are going to be driving to San Diego the second week of June.  Yay!  The most expensive gas month of the year.  Don't get me started.  I didn't choose the time, place, or activity.  It's a long story.  Don't get me started.

Noticing the Difference Already

I was reading comments sent in to CNN.com about the rising gas prices.  I've been reading about the prices going up and I saw yesterday that they have gone way up here.  I haven't really felt it yet because my commute is 3 miles and the hummingbird (my car's nickname) gets 35 mpg.

Other's are feeling it and we aren't anywhere near Memorial Day yet.  These people are going to be in some serious trouble this summer.  This was my favorite comment:

Bob Johnson of Houston, Texas
We unloaded two of our three SUVs for a high mileage sedan. We are driving less overall and going out less. Any extra cash is being stashed or paying down CC debt.

That gets me right here, I have to tell you.  To have to give up 2 of your SUVs and downgrade to a car.  I'm not sure how they deal with the pain and humiliation.  Worse than that, they can't afford the gas to get to a therapist to help them deal with this unreasonable hardship.  I'm not sure how Bob is going to get by.  Maybe if we all pray for him.

It's not all Bob's fault but I'll get into that a week from Monday.

Although, I've never owned an SUV.  Reading Bob's dilemma, I have mixed feelings.  On one hand, I've never known the joy of owning 3 SUVs.  On the other hand, I haven't had to go through the pain of losing two of them.  With SUVs, is it better to have love and lost than to never have loved at all?

Random Thoughts from the Headlines

W gave a big fat veto to healthcare for 4 million kids, supposedly because there might be some abuse of the system.  If that's the case, we need to shut down every government program in place.  It's not the case though.  There's just too much money at stake in healthcare.  This is changing though because every year, there are fewer and fewer people with health insurance.  When insurance companies can't make money, they will start lobbying for a change.  Probably something we don't like but it will be a change.  How about making health insurance mandatory like car insurance? 

Pennsylvania is adding a couple new slot parlors and Massachusetts is adding three new casinos.  The government makes a lot of money off of casinos so these things are going up all over the country.  I read that the government gets about half the take so people protesting in PA are pretty much out of luck.  We are headed for some pretty rough times financially as a country and lotteries and casinos are just going to make things worse.  Desperate people are going to risk money they can't afford hoping to be the big winner and solve all their financial problems.  There is likely going to be a lot of get rich quick infomercials in the next couple of years and the people making the commercials are going to get rich quick.

A Simple Little Trip In A Car

Last week we had to do some driving in the Salt Lake City area.  We made plans to meet my daughters for dinner at a place that was only a few miles away.  Maybe 10 or 15 miles.  I drove over to a main road and started south and ran into rush hour traffic (does it really only last for an hour anymore?). 

We live in such a small town that we never have to deal with traffic.  A lot of people out here don't own cars or have driver's licenses.  The grocery store is about a mile away and my commute to work is 3 miles. 

The traffic turned out to be not so bad.  I've just gotten used to no traffic so when I saw the wall of cars ahead of us, I figured we'd be moving in slow motion.  We were soon where we wanted to be or at least close enough to ask for directions.  That's a whole 'nuther story. 

Anyway, while I realize that the rising gas prices are going to cause the price of everything to go up, I couldn't help but think how nice it will be when there are fewer cars on the road.  Only people who truly need to go somewhere will be there. 

Yikes! Are We Ready for the Truth About Oil?

I was glancing through some articles on oil today and I came across one that was incredibly surprising.  Here's an excerpt:

"Domestic demand growth of as much as five per cent per year in key oil producing countries is already beginning to cannibalize exports and will increasingly do so in the future as production plateaus or declines in many of these countries."

No talk about hurricanes, driving seasons, or the fact that there is this weird new phenomenon called winter that makes things cold in the northern hemisphere which causes people to want to heat their houses.

Production is on a plateau or decline in oil producing countries and they are holding more back for themselves (selfish bastards that they are).

This article is refreshing and frightening all at the same time. 

It's refreshing because it's nice to hear a little bit of truth from news outlets (this one is from CNN).

It's frightening because you know that they held this story back for as long as they could but the word is going to get out.  Oil is going to become more expensive and much more quickly than even I thought. 

Follow along now as I take you through the looking glass and into my wandering mind.

While We're Talking About Driving . . .

A lot of money is spent on cars.  In fact, car sales makes up a large part of the US economy.  The economy was up in August unless you take car sales out of the equation.  Then consumption was down.

People should be paying cash for cars but they aren't.  Not even me yet but I'm really hoping that I will be paying cash for my next car.  I'm going to keep the two I have until I have saved up enough money to buy another car.

Consumer reports says that if you drive your car for 15 years, you'd save over $30,000.  That's just what you would save and doesn't count how much money you would have if you continued to pay the amount of a car payment into your savings account.

Quite frankly, 15 years seems like a long time, even to someone like me who doesn't care about cars.  If you were to keep the car for 10 years and put the second 5 years worth of payments into savings, you'd earn interest for those 5 years and be able to pay cash.

Most people can pay off their cars in 2 years if they really want to so you could start saving 3 years earlier if you wanted or buy a car 3 years earlier.  Once you by a car on cash, you could buy a new car every 5 years if you continued to make payments into your savings account.  You might just find that you like having the money more than the car though and start keeping your cars longer.

Oil Prices Are High Because . . .

Not because we're running out, heavens no.

Dozens of other reasons.  Take your pick.  What I find interesting about the articles on oil lately is that the tune has changed and we just go on like it's always been this way.

Before this year, everyone expected the gas prices to go up for Memorial Day and then go back down around Labor Day.  We were told that peak driving months drove the prices up.  We knew it, we expected it, and even though we didn't like it, we accepted it.

What's different this year?

Driving season is over but gas prices are on the verge of rising dramatically (give it about 4 weeks - just a guess).  Why?  It's hurricane season.  Oil prices are going up because a hurricane might hit something. 

Will the gas prices go down after hurricane season?  Ummm, no.  Sorry.  We are already being warned that when hurricane season ends, it will be winter.  That means that we might need electricity to heat our homes and that's going to cost money.

Every season now has a reason why oil prices are going to be high.  Like hurricanes and winter are brand new phenomenons that have never happened before.   Suddenly, out of the blue, it gets cold in January in the northern hemisphere.  I don't know what all you people in Minnesota were complaining about before now.  Whiners.

Maybe next April and half of May, we'll catch a break.

Probably not.  By then, China, India, and Brazil, will be blamed for using up all of OUR oil.  One thing that is going to become apparent is that even if "they" can hide the fact that we are running out of oil, they won't be able to hide the fact that we just can't produce enough, fast enough, to get some out to everyone. 

Pick a reason, any reason.  There will be more of them coming in the future.

"Oil prices are up and it's April.  What gives?"

"A butterfly flapped it's wings in Madagascar."

"Oh."

It Doesn't Look Like Gas Prices Are Going to Hold Out

Are we headed for a recession?  It depends on who you ask.  Some say yes and more say no.

If you remember, part of the equation for getting around the recession is to keep gas prices down.  I said a while back that my guess was that forces would act to try to keep gas prices down until the housing fiasco had reset.  Try.  It doesn't look like they are going to come close to succeeding.

Oil and gas reserves were tapped far more than expected the last week of August.

OPEC is saying that they aren't going to increase oil output.

There is more violence and tension in the Middle East and Nigeria.

Mexico has shut down refineries because of hurricanes.

All of these things are adding up to price increases in oil and there's a possibility that oil will hit an all time new high record in the very near future. 

If gas prices go up to where they were in May (or higher - yikes), it's going to cause a strain, probably to the breaking point.  Too many things are all happening at the same time.  Of course, "same time" for the housing market is probably an 18-24 month period so a lot can happen in there.

If gas prices hit a new high, I would like to change my previous guess for the chance of recession from 80% to 100%.

What do you think?

New York oil price nears record high

Oil, gold prices jump as heightened world political tensions unnerve investors

Hypothetical Question of the Day: Oil and Global Warming

That subject line sounds like I do this everyday.  Well, I do but I just don't blog about it.  Today, I'll share.

Let's say that the world continues to warm up (easy to pretend here where we've had about 4 weeks of 100 degree weather) and that oil continues to run out (not an "if" but a "when").

Do you think that there would be a migration toward more temperate areas of the world or will we find ways to heat and cool our houses in ways that don't require oil?

Bonus question: Again, assuming that oil will become more scarce and prices will go up, how many people will have to freeze to death before we see a major change in lifestyle?

Sword Point Saturday - Peak Oil

The availability and price of oil affects everything in our lives.  Transportation being the most obvious but it also includes plastics and everything that is stored in plastic or moved from one place to another.  How about pesticides that are kept in plastic barrels and transported 1,000 miles.  There's a triple whammy.

As the price of oil (and therefore gas) goes up, life is going to have to change for everyone.

I've already told you what I feel about the following two questions in past posts.  Now it's your turn.

For 5 Sword Points, do you think that Peak Oil is a reality or do you think it's being exaggerated?

For 5 more Sword Points, assuming that a decline in oil is inevitable at some point (even if it's not happening right now), what changes will be brought about by rising oil prices?

As is the usual, you can post your answers in the comments section for this post or you can do a post on your blog and link to this post.

Comfortable? And a New Term - "Credit Crunch"

I learned a new term today that I thought  I would pass on for those of you that have never heard of Credit Crunch before.  If you've been reading this blog for a while, we've talked about the condition but now it appears there is a name for it.

A Credit Crunch is what happens when house prices don't go up so people can't borrow against their equity in order to use borrowed money to buy things.  Spending slows down because of the Credit Crunch.

If people would quit borrowing money in order to buy things, we wouldn't have to worry about a Credit Crunch effecting the economy.  There would be no such thing as a credit crunch.

The same article talks about oil prices, which are going to be going up.  Surprise!  Oil is around $75 to $77 a barrel now and the article ends with this quote:

"People are getting comfortable with the idea of oil pushing above 100 dollars in the coming years."

Which people are comfortable with this? 

Peak Oil Piqued My Interest So I Took a Peek

We're running out of oil.  You could argue that we've been running out of oil since they day we started using it.  We've never used so much before so we are running out faster.

If you don't mind a bit of doom and gloom, read Jim Kunstler's weekly posts about peak oil.  Sometimes it's a bit of rehashing of what he's said earlier but I would bet that all of us that post on a single topic (you know, like people who write about getting out of debt), hit on the same vein again and again over time.

Some things are important enough to repeat and repeat again.

The comments section of Jim's blog is also good reading.  I don't read all the comments because there are literally hundreds and some of them are as long as the post itself.  They range from one side (Jim, this is too much doom and gloom) to the middle (where people add useful information) to the other side (where these people not only see an oil crisis coming, they can't wait so they can run around yelling, "I told you so, I told you so").

I'd put myself in the first group.  I believe in mankind's ability to adapt and innovate, not that it's necessarily going to be fun or easy.  It would be easier if the information about oil was more openly discussed.

If you haven't heard about it, go check it out.  Now, let's talk about money.

Here's A Little Twist On The Gas Prices That I Hadn't Thought About

I was able to get that chart uploaded last night but I came across this article in Writer of Light's blog so, true to my nature, I'm switching gears and I will try to get back to the chart tomorrow (unless something cool turns up between now and then).

I've mentioned in passing a couple times that Americans may become less mobile in the future.  Not that they won't be able to move from place to place but that it might cost enough that people voluntarily stop driving as much.  Voluntarily might not be the right word considering the financial situation so many people have themselves in.  If they can't afford it, it isn't as much them volunteering as they being forced into it.

"Put the credit card down.  Step away from the credit card.  Do it now!"  Don't ask me why I was taught to say, "Do it now," in the police acacemy.  It still sounds weird to say it.

Anyway, here's the thing.  A lot of the money that goes into repairing roads and building new roads comes from the gas tax.  This tax has not been raised in 14 years according to the article.  It has been working but if gas prices get too high and people cut back on buying gas, there will be less money to for road maintenance.

One possible answer is to raise the tax.

I Saw a SMART Car Yesterday

You couldn't miss it.  Well, you could if traffic was heavy since they are so small but if you can see one, you can't miss it.  I was suprised to see it because I just never thought I would see one around here and I was under the impression that they wouldn't be coming out in the US until next year.

Let me tell you that the picture doesn't do it justice.  It's the size of a golf cart.  One website I visited compared it to a motorcycle, a four-wheeled motorcycle.  That's probably about right.

I was slowing down for a 4-way stop that was coming up.  This little blue and silver smart car (looked to be the same style as the picture above) went zipping by me.  My head whipped to the left as I checked it out.  I continued to slow as the SMART Car drove through the busiest intersection in town without stopping.  The car might be smart but the driver wasn't.

If any of you know who this guy is, tell him you heard that he ran a stop sign in Wendover.  That should freak him out.  It was a blue/silver fortwo with personalized Idaho centennial plates - DA LILI. 

If it was me, I would have stopped.

Will the Housing Rebound Be Too Late?

When the house flipping game came to an end, the economy slowed down.  Optimists reported that the housing market would right itself soon and the economy would get back to normal.

Let me be the first to say that I have a habit of simplifyng things down to over-simplistic.  I like things simple.  I understand the world isn't simple but I like to see things as simply as possible.  It may not be right but I have no intention of changing.  Having said that, let me say that when it comes to making predictions, it usually isn't that simple.

Saying that the housing market will rebound and everything will be "all better," as my son says, doesn't take into account other major events.

Say, for instance, summer gas prices, which look like they will reach an all new record high this year.

We Don't Need No Stinkin' Personal Responsibility

On our trip Monday, my wife and I were discussing housing and gas prices.  We were talking about housing because we are going to be moving in the next couple of years.  We were talking about gas because we had to fill up for the trip.

I am curious how the two will effect the American lifestyle.  We didn't come to any conclusions on the trip but it did help pass the time as we crossed the salt flats.

I have mentioned before that I think that Americans in general will tend toward becoming renters instead of homeowners and I think this still holds true.

I haven't read much about the gas prices because I don't know that there is anything new to learn.  The world is running out of gas and the prices are going up.  The prices are going to keep going up.  Not continuously but as an overall pattern and over time, the slope will get steeper.

My wife and I understand this and are doing what we can at the moment.  We live .5 miles from where she works and 3 miles from where I work.  We don't go into town much so we usually get by with filling up the car once a month.  There are things that we could do better like getting a more fuel efficient car or moving to a location that wouldn't require us to drive 120 miles to get to Trey's doctor.  We are working toward both those things.

There used to be a bus out here before we moved here that went along the main road to get employees to the casinos but they don't have it anymore.  That would have been great.

Today, I decided to read the top story offered up by Yahoo news.  I just shook my head.