Metallic Pea

Frustrating People Since 1971.

Don’t Tear Down Your Storehouse

with 11 comments

‘A generous man will prosper; he who refreshes others will himself be refreshed.’  ~ Proverbs 11:25

 

Funny search engine terms used to find my blog:

  • reo speedwagon occult symbolism  [Riding the cult out…]

  • iranian fried chicken  [May I have some yardbird with my couscous?]

  • the ayers family korea  [I always knew Kevin had a lot of Seoul.]

 

 

  • A suggestion for the moms: A friend of mine returned from taking her grandchildren to the children’s museum at Baylor University and could not stop singing its praises. Perhaps a WPC Moms group field trip should be planned?

 

 

 

 

 

 

How much of the rise in gas prices is attributable to the overall rise in prices caused by dollar inflation? One way of finding out is to measure the price of gasoline in terms of “constant” dollars instead of nominal dollars. For instance, in 1971 – the year is significant because that was when President Richard Nixon took us totally off the gold standard – a gallon of gasoline that cost 50 cents a gallon would cost $2.66 today in 1971 dollars, as calculated by the Consumer Price Index. … [C]omparing the cost of a gallon of gas to “real money” like silver – the value of a gallon of gas is relatively unchanged. The cost of a gallon of gas in terms of the fake, inflation-roasted dollars we all must use, well, that’s another story.’

 

 

 

 

 

 

 

 

 

  • The U.S. national debt ‘has reached $455,000 per U.S. household. As that debt grows, the United States increasingly relies on foreigners, including China and Middle East oil producers, for financing.’

 

 

 

  • Glenn Beck used to ridicule Ron Paul’s economic warnings. Now, like others who have the courage to face the truth, Beck is singing the good doctor’s praises:

 

 

 

 

 

 

 

 

 

  • Reduce your standard of living now (while the situation is still under control), greatly increase your savings (in gold, which is real money) and rig for greatly changed patterns of production, consumption, employment and business for a considerable time. The hurricane that’s just starting to hit the economy will both trigger and worsen problems in other areas. Starting with politics, because nearly everyone today believes the ridiculous notion that the government should guide the economy.’

 

To-day’s 1980’s Moment is brought to you by: Texas’ own Christpher Cross (and his sweet Earl Campbell Houston Oilers jersey!) 

 

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11 Responses

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  1. I’m not sure everyone agrees with Ron Paul, but yes alot of people do! Some think that the democrats cause the higher prices as the prices started going sky high about 3 and 1/2 years ago when the democrats took control of congress!
    http://goodtimepolitics.com/2008/07/17/fla-billboard-reads-please-dont-vote-for-a-democrat/

    goodtimepolitics

    July 18, 2008 at 10:15 am

  2. Beer is good for you. My mom never told me that!

    Brian

    July 18, 2008 at 10:56 am

  3. That gas article makes a lot of broad economic assumptions with assertions of things that are not always the case. I think the ideas presented are decent, but I wouldn’t take it as 100% the way things are. I respect him for taking time to consider things in a very methodical way, but it must be noted that if it were that simple then people would not spend years getting degrees in this stuff. We could just do the same “scholarship” he has.

    I do agree with his overall claim that gas prices have been held down in the US and people are just now realizing what the rest of the world has known for a long time…this stuff aint cheap. When we were in Peru a few years ago it was over double what it was here. Do note however that some of that could be attributed to their policies. One thing a lot of non-economists don’t consider is that it isn’t as if the US is the only country that participates in creating trade barriers and random excise taxes. In any event, the literature I have seen supports the claim that we have pretty cheap gas. His way of getting to that conclusion is just incomplete and a little inaccurate in places where his blanket statements have holes.

    em

    July 18, 2008 at 11:30 pm

  4. The Greater Depression article is kind of entertaining. Again, he has some good points; but he is simply doing a point forecast of the most devastating circumstance. This is a lot like Y2K. We have problems, yes. But this doomsday thinking won’t get us out. Neither will having incompotent leaders in the government.
    Frankly, gemstones are perhaps even more improperly being overvalued than gas or even our dollar. If you don’t believe it, look at the multi-billion dollar fines and sanctions that have been put on De Beer’s and other rare ore companies for their artificial tampering with markets. That is a filthy business. http://www.justice.gov/atr/public/press_releases/2004/204592.htm

    Not to further your thoughts that gold is the end-all cure-all, but you will find this article interesting.
    http://www.financialsense.com/editorials/casey/2007/0125.html
    Beware though hammerhead, I still don’t want you telling me when we put in fenceposts to invest all my cash in gold!

    em

    July 18, 2008 at 11:49 pm

  5. As an aside, will your crazy friends and their articles please stop calling gas a commodity? IT IS NOT A COMMODITY! Sorry, that bugs me a lot.
    Gas is a GOOD. Crude oil is a COMMODITY.

    em

    July 18, 2008 at 11:53 pm

  6. Man, I’m filling up the place tonight…I just keep having more thoughts.
    About that De Beer’s stuff. I have a lot of resources on them that will make you cringe from the disturbing accusations of their practices over in Africa. Email me if you want to learn about it. I don’t want any young’ins reading those articles without mommy or daddy knowing.

    em

    July 18, 2008 at 11:55 pm

  7. It is definately a complicated issue–one that cannot be addressed by simply demanding Congress ‘do something about it.’

    De Beers is a pretty rotten monopoly, I agree. If folks knew what went into getting their diamonds on their fingers, they might not be so quick to buy them.

    As for gold, I would never advocate investing 100% of your money in it. Diversify, diversify, diversity! However, with the Dollar having lost 25% of its purchasing power over the last five years and gold having almost doubled in that time, I would say that investing in precious metals is at least worth investigating.

    ninepoundhammer

    July 19, 2008 at 6:58 am

  8. /nod @ hammerhead

    em

    July 19, 2008 at 12:26 pm

  9. http://www.csmonitor.com/2008/0623/p09s02-coop.html

    Matt, this article may be good for you to see an alternative view of the current gas prices. Don’t mistake this for my view either. It is however, one of the things to consider when attempting to figure out how we got to where we are in terms of gas prices. Our reliance on the cartel has been in place for a while. I hope people see me not flip-flopping by saying we have been paying too much and too little for gas at the same time. Too much because of the cartel’s restrictions of supply and nearly-monopolistic controls on price and too little because of the governments’ policies. (Also perhaps too much when you consider the governments’ policies for not extracting our own reserves and force-feeding a reliance on foreign production) Nevertheless, this article also has flaws like the other one(s). But, it does make an interesting point to consider. It isn’t the best article on the subject I’ve seen, but it was the best I could find tonight in layman’s terms.
    Adios,
    Eric

    em

    July 20, 2008 at 9:46 pm

  10. I agree on the whole: There is more than one reason for the economic reality we find ourselves in. OPEC certainly has an effect–but a long-term one due to the fact that they have been doing the same thing for decades; the recent spike is not helped by those policies but I still argue that it is the other factors having a greater effect.

    As for Congress passing that anti-trust legislation against OPEC, I am a bit incredulous that we would expect a foreign country to bow down to our laws–they are not within our jurisdiction.

    Secondly, it is a bit hypocritical–the U.S. Government IS a monopoly power and advocates those policies in many areas, such as the postal service. It is ILLEGAL for anyone other than the U.S. Postal Service to deliver a letter. If competition benefits everyone, why not let UPS/ FedEx compete for that business?

    ninepoundhammer

    July 21, 2008 at 10:03 am

  11. Matt, without knowing a bunch of elasticities, you will never know which factors have a greater effect. Until someone is able to figure that out, there will continue to be many facets to this issue. That being said, you are entitled to your opinion! I will choose to not have one right now because there are too many unknowns that are too pertinent. Allow me to show you some graphs and calculations sometime to show you what I mean?

    em

    July 21, 2008 at 11:02 am


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