Tipping point?

Discussion in 'General Discussion' started by Smitty, Feb 21, 2012.


  1. Smitty

    Smitty Monkey+

    Curious as to what you monkeys think gas prices would have to hit to reach a "tipping point"...


    Smitty
     
  2. TnAndy

    TnAndy Senior Member Founding Member

    5 bucks if it stays there, IMHO.

    I read every penny increase means 9 billion bucks out of folks pockets that would have been spent elsewhere in the economy. You consider the ripple effect of that much income NOT being spent in other areas, (drop in business, layoffs, bankruptcies ) plus the hidden costs in food, clothing, you-name-it, and yeah, I think somewhere around that point, the economy will roll over and LOOK like it's dying.

    THEN the use will drop off dramatically ( it already IS down over the last couple years ), the economy will surface for another gasp of air like a drowning man, prices will go up again, and the economy will go down again.

    We're already in "dunk" one or two of that.....result of hitting peak oil production worldwide, yet population NOT peaking. Every "recovery" in the past has had an associated rise in the use of oil. When you hit the wall of production peak, there is no recovery.

    What you see today IS the new norm....to be followed by a lower new norm....to be followed by a lower new norm.....etc

    We'll be looking back on 1990's as "the good ole days"......
     
    ColtCarbine likes this.
  3. CATO

    CATO Monkey+++

    EXACTLY! You don't even have to be a big gas user to be bent over a barrel by the increase. All of these commie-libtards think they will be unaffected because they drive a hybrid will be sorely mistaken when the cost of food doubles because companies that produce the food use gas-guzzlers and will be recouping their losses.

    Any commodity/goods-service that is touched by petrol will be affected which will affect everything else.

    Normal folks will start gardens...eat out less...go to the store less, which will just add to the ripples in a negative circular affect. Stores in turn will go out of business, people will be out of work on top of what we already have, taxes will go up to support them OR the .gov will steal from other programs.

    No outcomes are good.
     
    VisuTrac and ColtCarbine like this.
  4. Redneck Rebel

    Redneck Rebel Monkey++

    Yep, feeling it already and I very rarely drive. We use the bus every where we go... (can't beat it for a buck). Been grocery shopping lately? Seems in the past few months certain things have doubled in price already.
     
  5. Falcon15

    Falcon15 Falco Peregrinus

    My group's "tipping" or trigger point is $5.00 a gallon (national average) gasoline. That translates to about $4.80 a gallon gasoline local. Back in the early 90's I thought $1.00 a gallon gas was HIGH. Now I regularly shell out - on average - $3.50/gallon.

    Folks all around have been warned that $4.00-$5.00/gallon gasoline coming soon. The local news has been running stories on a regular cycle about this. Getting the sheeple ready, IMO. I think it is because of the summer blends hitting the market. It will hit down here first, since summer is quite literally, around the corner now. There may even be a $5.00 a gallon peak, but it will not stay there long, perhaps a month or two.

    Mind you, this is assuming there is no further panic spike in oil prices due to any conflict in the Mid-East that could (in the eyes of Commodities Future Traders, scum of the Earth, in other words) threaten oil supplies. We are already seeing a steady rise in WTI and Brent crude prices. The average crude price is over $105/BBL today, over the reverse sanctions being thrown by Iran at the UK and France. Even losing some of it's initial opening price of $105.26, it is currently trading at $105.14.

    This will guarantee a rise in gas prices at least to near or over the $4.00 mark within the next few days if the situation is not resolved. Gasoline prices have risen by approximately 10% over the past 5 days (that is $0.34/gallon locally) and the trend is upwards into late March/early April.

    Just a 20% increase in fuel prices from today would put us firmly in the $4.30/gallon average (locally. Higher elsewhere, probably closer to $4.50). That is when we will see the beginnings of the contraction. Fewer folks will travel, independent truckers will stop rolling as far, as frequently (diesel is historically $0.20 higher per gallon than gasoline putting it far closer to $5.00 a gallon). Those prices would make the gasoline prices during the last major spike in crude prices look pathetic. One thing you must note: when crude dropped from it's highs of $102.00/bbl, and went to $75.00/bbl average, the gasoline prices did not drop significantly. Just for comparison, when gasoline was around $1.25 a gallon in 1994, crude was trading at $16.56/BBL average. We will never see sub-$3.00 a gallon gasoline again.

    For comparison - in April of 2011, crude was trading at an average of $102.00/BBL. Gasoline prices averaged $3.88/gallon. Diesel averaged $4.10/gallon. The gas you are buying today is an average of $3.58/gallon. IMO gasoline will reach $4.50/gallon and diesel will hit closer to $5.00 a gallon easily by summer, if oil prices do not drop back below $100.00/bbl.
    YMMV.
     
    VisuTrac and ColtCarbine like this.
  6. Gray Wolf

    Gray Wolf Monkey+++

    Right now, the US is EXPORTING fuel. That keeps the price up.
    The real cost of fuel is not the price that you pay at the pump.
    The real cost will be reflected in EVERYTHING that you buy.
    Produce goes from the farm to the packing house, from the packing house to the grocery warehouse, from the grocery warehouse to the store. At every step, the cost of the fuel has to be added into the price.

    Raw materials to the refiner, then to the manufacturer, then to a warehouse, then to a store where you buy them. It's hard to think of anything that we buy that is not transported 3 or more times. That is where the fuel cost really bites us.
     
    VisuTrac, Guit_fishN and Falcon15 like this.
  7. Falcon15

    Falcon15 Falco Peregrinus

    And that is precisely why you should be watching diesel as well as gasoline prices. When they go up, transportation costs go up, etc. etc. etc.

    Consider that a majority of the trucks that move the goods across the nation on these various moves are fueled from finite accounts, that being whatever cost the independent or small trucking firms can feasibly afford. I know for a fact that fuel surcharges alone can be adjusted in a heartbeat. Those surcharges reflect 50 or more percent of the cost of transportation. This is not inclusive of the imported items that are brought in from overseas on diesel powered vessels.

    The last major account contract I negotiated with a trucking firm had a break down in their pricing. They were a small firm, reliant upon contract (independent) drivers. The fuel costs alone were 68% of the price per mile for dedicated truckloads.

    Consider this: a majority of all items (I don't care if they are left handed booger flickers or crates of carrots) are moved by independent or small trucking firms. Especially the short to medium distance (500 or less miles) hauls. Even the large firms have operational overhead. When they cannot afford to keep their entire fleet operational, or the independent truckers can no longer feasibly afford to fuel their trucks (and still make money at the end of the day), we are screwed.

    Independent truckers start trying to get jobs at major freight companies. Major freight companies start taking losses against fuel costs (they adjust their fuel costs every 3 months on average). So, they terminate truckers (more drain on the unemployment system, food stamps etc.), they reduce the operational fleet (lowering maintenance costs - which will be rising as well - parts are expensive - and a further reduction of personnel), and raise their prices.

    It is a zero sum game at $5.00+/gallon diesel. This is not even considering air freight (AV Gas prices would make you shudder - average of $6-$7 a gallon local for 100LL or JetA) or trains ( diesel powered, limited access, slow moving intra-city, among other things).

    Bottom line? Tighten your belt, it is going to be a rough ride if oil does not go down. It'll be a "puke-fest" if it keeps going up.
     
    VisuTrac likes this.
  8. TheEconomist

    TheEconomist Creighton Bluejay Site Supporter+

  9. TnAndy

    TnAndy Senior Member Founding Member

    If inflation was computed the way it was in 1980 by the Bureau of Labor Statistics, it would be 10.5% annually according to Shadowstats.com.
     
  10. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    When Jack Daniel's Single Barrel goes over $50/bottle, I will be at my tipping point.
     
    VisuTrac, oldawg, Cephus and 7 others like this.
  11. Smitty

    Smitty Monkey+

    All good points and along my same line of thinking. I'm just wondering if the prediction of 4.25 a gallon by april is right.... if so I think we are looking at the 5/gal mark by july...I just hope I can take care of a few very important things very soon as I don't think our economy and all the sheep are going to be able to handle this in the least...just my 2¢


    Smitty
     
  12. fedorthedog

    fedorthedog Monkey++

    I think that will be the stop tipping point ;)

    The real impact is when the value of this years harvest comes in and hits the stores. Agra biz will pass on the cost even if Joe farmer goes broke because they dont pay what it cost to raise. Its more than just trucking, field equipment uses a lot of fuel.
     
    oldawg and Seawolf1090 like this.
  13. Falcon15

    Falcon15 Falco Peregrinus

    Well, Smitty, I can call you Smitty, right? Well, Smitty, I watched as gasoline prices rose $0.15/gallon over 1.5 hours today at my local gas stations from $3.38/gallon average low to $3.53 average low, with highs at $3.80/gallon. So, yeah, pretty sure April is late in the game. More like March or before.
     
    VisuTrac likes this.
  14. Smitty

    Smitty Monkey+

    Smitty is fine. Well I certainly hope you're wrong, for all our sakes, but I feel you're right.


    Smitty
     
  15. hedger

    hedger Monkey+

    Exactly!

    One of the most under-reported facts about the on-going scamming of the public (when it comes to the so-called market basket used for computing inflation) is that the current administration has taken items out of the market basket that show a sharp jump in price/inflation and then they replace that item with another that does not show as much increase.

    Therefore, we have a continuously manipulated market basket that is guaranteed to NEVER accurately represent the actual price/inflation increases that most consumers actually experience.
     
    TheEconomist likes this.
  16. Hey guys new to the site. Ya i went to get coffee the other day and almost keeled over it almost doubled in price as far, as gas goes how can it still be going up when the barrel price is going down? Greedy maybe or a bigger agenda ?
     
  17. Midnightblue72

    Midnightblue72 Monkey+

    Here in SoCal we are nearly at the tipping point. I often hear the argument of, "Take a bus or train" coming from people who dont live near Southern Kalifornia. Mass transit is available if you want to walk 10 miles to get to your stop and 10 miles to get to your job, we are spread out with vast areas in reality with no alternative transportation.

    As it stands, paying over $4.00 is now and with that, crime and higher prices. Try getting gas on a weekend at night with prices this high and then add in the factor of being near the end of the month and you have a recipe for violent crime.

    In a way, I am thankful it is not summer time right now, when we had the last spike, I came close to having a situation go side ways three times. If you are in an area with a high number of low income or near a higher crime area, use your best situational awareness when getting gas or going out.

    If you are at an island pumping, be aware of whats behind you, I tend to place my back to the pump and scan. If I am approached, I have no issues giving verbal commands in a clear and concise way. "Please, STEP BACK." Panhandling beggars are an epidemic now too, same deal, "Go away" if they are pushy and always make sure it's not a distraction so someone can hit your 6

    Bad things are coming, if Im having a hard time with a well paying job, what will Joe "living off the system" Smith do when he wants gas and waht is he willing to do to get it?

    Holy Christ all mighty, it sounds like I am talking about the Mad Max movie.
     
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  18. fedorthedog

    fedorthedog Monkey++

    Holy Christ all mighty, it sounds like I am talking about the Mad Max movie.

    That was just a movie this will be much worse
     
    BTPost and Falcon15 like this.
  19. TnAndy

    TnAndy Senior Member Founding Member

    That's exactly WHY 5 buck gas will break this country while 8 buck gas is tolerable in Europe.....they are close in, geographically speaking, and have good mass transit. Neither of those is true here.
     
    Tracy likes this.
  20. Falcon15

    Falcon15 Falco Peregrinus

    Well, here is a great example of price increasing due to fuel increases and other factors. I buy 50# bags of washed pinto beans from Sams Club. less than one year ago a bag of beans ran approximately $15.00 ($0.30/pound). Today, I bought 2 bags of beans (I have business club hours as a business member 7:30 AM -10:00 AM). They are $32.00 each ($0.64/pound), more than double in price. he same with 50 pound bags of white rice. It has jumped from $0.12 cents a pound to over $0.26 cents a pound. Yes, drought and harvest conditions do factor. FUEL AND TRANSPORT COSTS FACTOR AS WELL. We all have seen 25%-50% increases due to drought, flooding, or bad harvest. 100%+ increases? Fuel is a major factor.
     
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