Re: Gas prices
cat tail
2/20/2012 11:04:44 AM
I just read gas prices are already up nearly 9% from the start of the year.
And the price of gasoline in the U.S. will likely hit a nationwide average of $4 by this summer, said Dan Dicker, oil trader and author of "Oil's Endless Bid." The last time prices topped $4 was 2008 and Dicker said there's a one in three chance that gas could reach $5 a gallon.
You're right Dex. I've been planning my trips so I can get gas in New Jersey, where the lower taxes make the prices seem like a bargain compared to New York. But it's all relative, because the prices are still extremely high.
Gas prices
Dex
2/20/2012 10:44:49 AM
The way gas prices are escalating, inflation is destined to become a bigger issue very quickly. I heard gas prices are at all time highs for this time of the year, and it appears the summer will be even worse.
Re: I know nobody cares about Retirees or Savers but still...
mInvestor
2/20/2012 9:52:30 AM
@Ashishi,
Agree with you that the current interest rate is crazy, and it punishes all savers and retirees. However, raising the interest rate right awasy may not be a good idea. The high interest rate may help savers and maybe help redecuing deficits, but it also makes it more expensive to do business, especiallly for medium and small size businesses. Some report and research alreay found that medium and small businesses feel quite difficult to get necessary investment. And Small business is the engine for our economy, it creates more 50% jobs for the scoiety.Raising interest rate right away may hurt them badly.
THe problem of today's interest rate was FED left this low rate too long after 2003. But is it now a good time to correct that error?
Keeping a balanced interest rate is quite challenge. Somtimes it's more art than science.
But what you are suggesting is one of several options people start to discuss. Good to know we still have some options (comparing to the situation in Greece).
Re: I know nobody cares about Retirees or Savers but still...
Scott Raynovich
2/20/2012 8:54:01 AM
Yeah, Ashish, amazing stuff.
Historical actions are being taken. The truth is we have no idea what will happen.
Re: I know nobody cares about Retirees or Savers but still...
back2basicz
2/20/2012 3:41:52 AM
Scott,
Racketeering and speculation benefitted the most from Hyper-Inflation.
Class warfare prevailed;People living in Villages did better than those in Cities;Tangible Assets did very well.
"The Constant taking of the Soft political option with respect to Money".
Wow,I could'nt say it better...
Brazil/Argentina in the 1980s.Zimbabwe in the early 2000s and America/Japan tommorow???
Brilliant template for the future in America.What do you think?
Adam Ferguson had a very good lecture here.
http://www.youtube.com/watch?v=3TRacxQvYYeh78&feature=player_embedded#!
Regards
Ashish.
Yep, I agree. I think it's easier to follow what you perceive as the lead of other people, so if your neighbors are spending -- you may start buying, too. Is it the best strategy? No. But I think we can all find examples of people doing it in our own lives.
Re: I know nobody cares about Retirees or Savers but still...
Scott Raynovich
2/19/2012 6:03:12 PM
Ashish,
True enough, this environment punishes savers and retirees.
But as far as private pensions -- as far as I know there aren't many left! If you have one you are lucky.
--Scott
I know nobody cares about Retirees or Savers but still...
back2basicz
2/19/2012 4:08:24 AM
Scott,
Today for any retiree who does not have automatic COLAs embedded into their Pensions[Practically most of the Private Sector] or someone who has run out of Unemployment benefits and still not found anything meaningful(forcing them to live on Savings) ;even this Inflation rate is enough to prolong their misery.
We are living in a world of 0.5% CDs and 0.25% Interest rate Bank Accounts.
But these numbers are'nt even accurate-(Accurate Inflation numbers for anyone who drives,eats or has to rent a place today) are actually over 5%.
So this means every year we continue with this regime of Negative Interest Rates,Savers are getting penalized and forced to speculate on risky assets like Apple Stock or Commodities.
Do we want to encourage Irresponsible behavior which caused the last Financial Crisis in 2008(the effects of which the economy continues to suffer from today) or encourage good fiscal behavior??
If we want Good,responsible fiscal behavior at the individual level we need to get Kansas Fed Governor-Thomas Hoenig or Jim Grant in charge of the Federal Reserve.
Interest Rates need to go up to atleast 2% for starters.
More here
http://finance.yahoo.com/news/getting-back-gold-standard-050035801.html?l=1
Regards
Ashish.
Interest Rates on their own are not a very accurate tool but the RBI has shown that they do work.
back2basicz
2/19/2012 3:52:52 AM
Anand,
I don't know if you are tracking the latest Inflation numbers out of India today but the RBI's policy of raising Interest rates has worked(finally)-Inflation has come down sharply(even if you account for the base effect) compared to the period between December 2009 to December 2011.
I agree Interest rates on their own are not a good enough tool to tame inflation.But when you have absolutely irresponsible Governments at both the State and Central Levels(who are all spending much-much more than they earn through revenue) and unwilling to take action to boost infrastructure(thanks to policy inaction);then Interest rates[& increasing the Cash Reserve Ratio] managed by a (relatively) Independent Central Bank are the only way to manage Inflation.
Yes,they are behind they were behind the curve between 2010-2011;but now they are very much determined to put the Inflation Genie back in the bottle.
And its working-Thanks to High Interest Rates available on Bank Fixed Deposits (You can get Interest rates of close to 10% on 1 Year FDs)more people are putting money in the bank rather than spending it or pouring it into Housing,Gold and Land.
This is having a slow but steady effect of trickling down to reduce/dampen inflation.
Hopefully,the RBI will not revese stance and go on a cutting spree(like what most Industrialists are demanding today) for atleast another 4-6 months.
A Small cut of between 25-50 basis points is fine.But nothing more,not until Year on Year Inflation comes below 5% per annum.
Regards
Ashish.
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