Living Car Free - Is $4 a gallon gas enough??

That would be a start...however a substantial amount of our manufacturing infrastructure (machinery) has been sold over seas to. I suspect most companies will just shut their doors before they would move production back to the US. They don't have the capital to reinvest in the US anymore. We have be raped many times over by big business and the government. Some businesses that still have plants in the US might be able to ramp up production, but as far as I can see all that the revoking of tax credits will do is drive the prices up, not create jobs.

Aaron:)

Yep, the CEO of American business , Ben Dover, is the man. :roflmao2:

Haven't kept up with all 15 pages of this thread, but found an interesting article that relates to the gas topic and politics in general. It discusses the high gas prices and the reality that higher is a way of life now.

http://seattletimes.nwsource.com/html/opinion/2004444413_friedman29.html

A year later, prices are around $2.36/gal. My last tank was $2.61/gal. I figure we'll be back to $4/gal by summer '10, if not sooner. I can squeeze 30 mpg out of my current car on the highway, but city mileage is much less. I'm trying to save a little money to buy a more FE vehicle in a year's time, because the overall trend for prices will be up, not down. Living close to class will remain a priority. I'm 2 miles from campus, but field assignments take me around town and necessitate a car, so going CF isn't an option.

look into the cash for guzzlers program.

^ It's an interesting idea, but it requires purchasing a new vehicle (which is something I'll never do). Depending on when the money's saved, I'll probably go for a Metro or Civic.

Not for us guys you still got it reasonable

I guess all those who thought gas was going to pass $4.00 dollars a gallon were all wrong including myself. It turns out the wild jump in price was due to the speculators on Wall Street were driving up the price all along and it had nothing to do with Peak Oil. However, we better get ready all over again because the speculators are starting to drive it back up again with the economy improving. Not many people noticed but the price jumped another 20% this year.

I think we have to get energy out of the speculator market because this is just as important as fuel economy.

I guess all those who thought gas was going to pass $4.00 dollars a gallon were all wrong including myself. It turns out the wild jump in price was due to the speculators on Wall Street were driving up the price all along and it had nothing to do with Peak Oil. However, we better get ready all over again because the speculators are starting to drive it back up again with the economy improving. Not many people noticed but the price jumped another 20% this year.

I think we have to get energy out of the speculator market because this is just as important as fuel economy.

I wouldn't say no connection. Ultimately the speculators could drive up the price because they recognized that supplies were tight. In the old days, there was excess production capacity that was being held offline which would be brought online and which would drive the price back down again. My understanding is that there was no such excess capacity last year - it was only when the recession coupled with high prices started to drive down consumption that the speculative bubble was broken.

I guess all those who thought gas was going to pass $4.00 dollars a gallon were all wrong including myself. It turns out the wild jump in price was due to the speculators on Wall Street were driving up the price all along and it had nothing to do with Peak Oil.

I disagree with the whole idea that speculators can drive up the price of oil by trading futures contracts (which is the allegation, btw, playing contango is a different matter).

Anyway, the way the futures market works, let's pretend ericy has a can of Coke for sale. Dahon.Steve wants to buy a can of coke. Ericy is selling his can of coke, for $36. But instead of buying the Coke, Dahon.Steve sits on the sidelines. Instead, Tabor buys the can on Coke, thinking it is a good investment. Later, when Coke has almost doubled in price Tabor sells the Coke to Dahon.Steve for $60.

How can speculators drive up the price of the commodity when the person that wants the commodity can buy it at the same price the speculator can? Dahon.Steve could have purchased the Coke for $36, but instead he sat on his hands wile Tabor made a 66% profit.

I think what happened this summer is that we saw peak oil, and how dependent our economy is on cheap energy.


Not many people noticed but the price jumped another 20% this year.

Actually it is up a lot more. I am kicking myself that I didn't buy a bunch at $36 and sell at $60.


I think we have to get energy out of the speculator market because this is just as important as fuel economy.

I disagree. Speculators can't change the price of a commodity, they can only help find the correct price faster. IMHO:

The Onion Conundrum (http://money.cnn.com/2008/06/27/news/economy/The_onion_conundrum_Birger.fortune/)

After seeing what happened in 2008, I revised my opinion on the role of speculation in setting the price of oil. What I think now is, it's possible to bid up the price of oil by buying enough futures contracts. It'll take a few months for the supply & demand fundamentals to catch up and bring the price back down.

But that's enough for a big enough market mover to make lots of money. Not because the market mover can control the oil price permanently, but because the market mover has a lot of control over when the price will spike up and when it will spike down.

I disagree with the whole idea that speculators can drive up the price of oil by trading futures contracts (which is the allegation, btw, playing contango is a different matter).

Anyway, the way the futures market works, let's pretend ericy has a can of Coke for sale. Dahon.Steve wants to buy a can of coke. Ericy is selling his can of coke, for $36. But instead of buying the Coke, Dahon.Steve sits on the sidelines. Instead, Tabor buys the can on Coke, thinking it is a good investment. Later, when Coke has almost doubled in price Tabor sells the Coke to Dahon.Steve for $60.

How can speculators drive up the price of the commodity when the person that wants the commodity can buy it at the same price the speculator can? Dahon.Steve could have purchased the Coke for $36, but instead he sat on his hands wile Tabor made a 66% profit.

I think what happened this summer is that we saw peak oil, and how dependent our economy is on cheap energy.



Actually it is up a lot more. I am kicking myself that I didn't buy a bunch at $36 and sell at $60.



I disagree. Speculators can't change the price of a commodity, they can only help find the correct price faster. IMHO:The Onion Conundrum (http://money.cnn.com/2008/06/27/news/economy/The_onion_conundrum_Birger.fortune/)

I'm not sure about your illustration of the futures market. I think it works like ericy thinks the price of Coke will rise in the future, so he "buys" a can of Coke for $36, but the Coke won't be delivered for another six months. Ericy is hoping (betting, really) that the actual price of Coke in six months will be $40, so he will make a $4 profit.

There might not be actual price fixing in the commodities markets, but there is a lot of gambling and psychology involved. People get "oil fever" (or real estate fever, or tulip fever or whatever). They think the future price will rise much more than it actually does, and they end up losing their shirts. In the Coke example, ericy, with a bad case of Coke fever, bought six month futures of Coke for $36. But the actual price of coke in six months is only $20. ericy is forced to pay the futures contract and is stuck with a $16 loss.

He probably doesn't have enough money to cover the futures contract, so he declares bankruptcy--unless he had swapped his contract to BankAmerica or had it insured with AIG.