Tuesday, October 11, 2005

Musings 70--The looming recession...

I have never considered myself one of the greater thinkers in the world, but I may be about to change my mind. Maybe it is because most people can't see the forest for the trees. I, on the other hand, have always been able to see the forest...the miles and miles of forests.

My prattling in the above paragragh is about one thing and one thing only--oil prices. Can we as a nation not see that the two things which make our economy chug along are oil and oil products? Everything we eat, everything we drive, everything we wear, everything we heat, everything we buy...ah, just everything is tied to oil and gas. Hence, it does not take an Einstein to understand that there is a monster that is waiting to devour us.

I generally don't make predictions, but I am making one anyway. This year, right after Christmas, we will run headlong into the recession monster. It will not be just a little bump like after 9-11. I predict it will be a whopper...maybe, even, a big mac. And, I fear that the average American Joe will be the the special sauce that gets eaten up.

I am starting to see estimates that natural gas prices will be double the cost of last year. In plain English, if you paid $200 per month last year, you will pay $400 this year, $400 becomes $800, etc. Most Americans cannot put up with such an increase, because real wages have only gone up about 3.7% this year. Folks that live paycheck to paycheck will be wiped out. Others that have some savings will see those savings dwindle away. Depending on how long the recession lasts, most people in the middle class may find themselves dropped into the realm of the lower class. You can only dip into the savings so often.

Big oil continues to make record profits. During the last decade, big oil made about 33 cents per gallon of gas sold. Since the last quarter of 2004, big oil has make 95 cents per gallon sold. Record profits are being made while the rest of us suffer.

When Mr. President ran for election in 2000, he called himself the compassionate conservative. Since he has not shown that he is truly compassionate about anything, I guess he had to use his friends at the big oil companies to create a group of people that he can feel sorry for. His mother can then continue to wander around Texas and talk some more about the "under-priviledged." I just didn't think she would be talking about me. Being poor is gonna suck!

I sincerely hope that I am wrong with my predictions, but all of the indicators seem to point this way. The first major indicator will be retail sales from Thanksgiving to Christmas. The second indicator will be the continuing rise of gasoline prices. The third and final indicator will be the interest rates. If the housing bubble bursts throughout the United States, interest rates will rise and things will unravel rather rapidly. These are the signs to watch for, and it does not look like a bright future for most of us.

With 2006 fast approaching, my hope is that I am reading the tea leaves incorrectly. Maybe Mr. President will pull a rabbit out of his hat, and we will all be saved. However, my first name is Thomas...and I doubt...much like my namesake in the scriptures. I really, really doubt it. Let us all pray I am wrong.

2 Comments:

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At 9:25 PM, Blogger I Think You're All Idiots said...

"Big oil continues to make record profits. During the last decade, big oil made about 33 cents per gallon of gas sold. Since the last quarter of 2004, big oil has make 95 cents per gallon sold. Record profits are being made while the rest of us suffer."

I understand that to mean thus:
Gas in the early 90's ran about $1.20 to $1.50.If the big oil people made 33 cents per gallon that's about a 25 to 35% profit.
Gas today runs about $2.80 to $3.15. If the oil co.'s made 95 cents per gallon profit now, that is still about a 30% profit. Granted they are making more money but they are also selling more oil.

"Let us all pray I am wrong."

Some things just know and really don't need to pray about.:) Just kidding buddy.
See you tomorrow.

 

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