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This Time It's The Same - And That's Not Good
There has been much discussion by the mainstream media of the rise in gas prices since we initially showed the equity market's dependence (or transitory correlation if you are a Keynesian) on this consumer-crushing unintended consequence of the new normal liquification of our economy. However, while most have focused on the absolute levels (as we noted the $3.75-80 Regular appears to be a limiter in recent years), over time this has not been the case. The stagnation of average hourly earnings combined with the price of gas shows why the last two years have not had the consumer-driven surge of the initial 2009 lurch (or the pre-crisis economy). We are trapped in an era when the average hourly wage buys a de minimus amount of energy and just as we saw heading into 2008, this relative price surge is occurring just as the macro-economic data itself is rolling over. This time it's the same - a double-dip in macro surprises driven by relative gas prices.
Charts: Bloomberg
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Don't worry, it usually takes quite awhile to starve to death......
Those gallons of gas per hour worked shoud be hedonically adjusted.
People will just substitute mopeds for automobiles. At least in the city, they will theoretically get you there just as fast. Maybe we can just arrange a swap with Asia: our cars for their mopeds.
have you priced a vespa moped lately in the usa...? most americans couldnt afford to buy one and they dont sell the 'cheap' asian mopeds in the usa.
I remember a moped use to cost a little more than a nice bicycle. High school kids could afford them back then.
In the not-so-distant future, enterprising individuals might be able to make a buck converting bicycles to electric scooters, for the mechanically inept.
you can already buy a kit to convert a bike but they costs big bucks.....and you have to have a drivers lic, state tags and insurance. might as well buy a car or actual small motorcycle.
Just had a vision of someone parking a horse and feeding both it and the meter.
They're faster. Substantially faster. It's why couriers use them. The developing world runs on these:
http://3.bp.blogspot.com/-JrDsTS90Lz4/TnBBF90Mo_I/AAAAAAAADOY/B5U8sJoQRA...
Oh please....
In Hitlers time, it used to be calculated "Cubic Meters of Gas per hour worked"...
now it's oil...
and soon lead...
...
PRINT!!! BEN!!! PRINT!!!
About three weeks with zero food. Of course, you can extend the misery and give people some hope by rationing.
Most Americans I've seen could last a year or two.
Nice limp dick arrow at the end. Looks to me like gold and red are going to 50.
http://www.youtube.com/watch?v=BX-7BlRc_a0
I quit driving 7 years ago. Fuck tbose oil companies and jpm
dbl delete
Meh. We shouldn't be so worried about $3.80. It will be $50.00+ if you can get it at all by the time Ben's done printing. Let the good times roll.
Ben didn't create the global civilization that chooses to burn through 88 billion barrels each and every day - most of it in low-efficiency ICEs.
Man, I was pissed when the service station attendent stopped wearing a tie, stopped checking your oil, wash your windows, and checked your tire air pressure!
Can Bernanke produce fuel in his meth lab?
Ya know, one could be forgiven for thinking our economy is more energy-bound than anything else.
@nodebt
Yeah, maybe--------
But one cannot be forgiven for still driving
Comrades, have we learned nothing? There will be no forgiveness for those caught thinking.
Again re-posting this:
For any period of 6 MONTHS of longer:
- Crude oil at $40 = Growth
- Crude oil at $70 = Stall
- Crude oil at $90 = Recession
If crude oil stays above $90 for longer than 1 year, it's a guranteed depression, since supply lines get broken.
That's where we are now, hence 47 million in food stamps and 50% of population receiving some kinds of gov subsidy. Supply lines are broken due to lack of energy.
Crude oil at $150+ = people start eating each other.
It could be cruelly true. Not joking.
Western civilization depends solely on crude oil.
No crude oil = Cave man
Seeds motherfuckers! Heirloom seeds!
No crude oil = 1700s, actually.
No agriculture = caveman.
And, though Europeans might not believe it, you can farm without oil fertilizers... just not enough to feed 7 billion people...
Hence the US's new found interest in ridding north central Africa of its terrorists.......and its sweet crude....
Three Days of the Condor-- We should have done it in '74...
Im sorry....were those your margins?
OK, someone needs to explain this to me. I guess I'm stupid so please keep it simple.
I live in Europe where a gallon of gas is north of $8.00. On top of that everything else costs 20-50% more than in the U.S.
The explaination I need is WHAT THE FUCK IS THE PROBLEM? What the hell is everyone crying about? Is there no room for a price that includes externalities, cuz if not you're all screwed.
People in the US live and work at greater distances. Our general range of travel is based on cheap oil. Our cities are spralled out across greater distances. Now, the cost every activity has a "fuel" surcharge. When oil goes up things stop moving and start fading. quick.
Nope, Europe is bigger than the lower 48, and we travel just as much, but it costs twice as much. The argument that "Europe is small" doesn't cut it. Try driving through Berlin or Prague or Paris by car, it's the same commuting distance as most U.S. cities. And just as many folks live outside the city and in the "burbs", and for the same reasons as in the U.S. One difference is we don't see such huge swings in the price of fuel, it's just always expensive. Also it doesn't take 400 horsepower for a single person to get to work, if you've got more than 100 ponies under the hood and a car that weighs more than a ton you're the exception, even delivery vehicles. So if we don't depend on cheap oil here, how much longer will the U.S. be able to? And then what?
Europeans had more money. Outside of Germany the Eurozone is in a depression. Americans aren't paid as much as Europeans. Notcie how the majority of our jobs that were outsourced went to Asia, not Europe.
Tiny clown-cars (no offense) and more efficient diesel engines (something of an oxymoron). Total time driving is not solely determined by distance.
a while back someoone referred me to vw's euro website. the cars were getting something like twenty or more mpgs than the supposedly identical us model. why cant we have the same tech? oil lobby?
The insane smog laws, especially for diesel engines in California and other hard-hitter states ruin efficient diesel engine sales. A European BMW 518d/520d diesel gets about 50mpg, owning the Prius on a European roadtrip test, but is not sold in the states. So oil lobby is doing their work.
Keep in mind 90% of everyday total miles are commuting and errands within the metropolitan area. Rarely do people in Europe and USA leave their areas to go further out- roadtrips are the exception, not the rule.
As for Los Angeles vs European metropolitan areas, to live in decency in Los Angeles, a car is a must. Public transport is inefficient to the bone, where it takes one 3.5 hours to get from Santa Monica to Disneyland/Orange County. Same trip in car, in semi-heavy traffic can be made in 1 hour. Driving becomes a way of life and cheap fuel is an everyday necessity without efficent diesel engines.
In (almost) any European city, public transport is abundantly available, enabling to leave the car, traffic and nerves at home. After calculations I see that European counterperts actually pay less in total fuel cost than Los Angeles' inhabitants. In LA you just sit more in traffic, more fuel, more repairs/maintenance, etc... When you are FORCED to chunk out $400-700 in fuel each month due to commute and life necessities, cost of fuel has great impact.
Another geographic note on Scandinavia by observation - the suburbs with best access of public transport, especially metro's are usually most densley populated by immigrants. The suburbs/areas that don't have access to efficient public transport have more afluent people living there who commute primarily by car.
USA is absolutely dependent on cheap fuel, where Europe has alternatives in place.
I feel bad for the truck-owners of USA. With $150-200 around the corner for a tank of 250 miles/400 km... pain is coming.
...... which is one reason Europe is twice as fucked as we are in the US.
If you've spent much time here you understand the feeling amongst many ZH'ers and many US citizens in general to NOT BE LIKE THAT, despite our governments efforts to copy the majority of Europe's failed model in every way.
We like our energy cheap and abundant. We built the whole goddam place pretty much on that premise. If that fails, so do we. Period.
Yep, I agree completely. And yes, I spent about 45 years there... :-) But what I see happening in our neighbor Germany will never happen in the U.S., at least not until oil hits 150. Of course then it's too late...
And yeah, we have this crazy way of getting around here called "trains" :-) I'm sure you're familiar with them, but for those that aren't they are these like big electrified cars that hold dozens of people each and are connected together. They run on dead dinosuars like cars and, like cars, they can go almost anywhere. So here's the cool part, they move many many more people per dinosuar! I know, it's a crazy concept not having your own personal 3 ton piece of steel but hey, you can read a book while you're moving! It's very futuristist, maybe the U.S. goverment will consider it one day when they exhaust all the other options (like dead soldiers?).
We have trains outside of our cities, but the train stations tend to be in more remote areas in my experience. So you could take a train to work, but then you just have to walk an extra 10-15 miles to work.
We have trains here too, they are run by a government monopoly corporation which hasn't been profitable in quite some time, if it ever was. Your trains will grind to a halt when your governments can no longer afford to subsidize them, and more importantly, the fuel needed to run them, and service them, and maintain them, and their workers and the track and the stations and the yards. It is simply disingenuous to leave all those necessary, fuel-guzzling components of a rail network out of the picture.
In the USA the Amtrak between NY and DC is the only run that is actually used for daily travel. Every other line is for vacationeers or poor people who must travel across country but can aford not to go by bus. From Las Vegas one must drive 90 miles to Kingston Arizona to catch a train that ALWAYS runs 4 hours late coming out of LA (only 250 miles away and it is always that behind). Trains are mostly for the folks who just like the train experience....they are not a reliable form of transportation.
Speaking as a dead American soldier, I'll rise to take issue with your uncharitable assessment of my services. Thought we had more or less gotten that established.
You don't understand. It's not a matter of "if". It's a matter of when. And the when is now.
Europe and all something for nothing social program program centered countries could be graphed where the more social service thingies are free, the more everything else costs more. The laws of physics are similar with heat and thermo dynamics where you can not get something for nothing. Reality always catches up. clever bankers can borrow money on illusiory bonds that will never be paid back for a time but eventually economic reality always balances. When it does the banking elete have the good stuff and everyone else is the stuff.
Externalities!?! WTF!
WTF WTF? And also WTF?
nope. not following it.
Most don't so you're in the majority.
Soon enough it'll be... gallons of gas per citizen fed...
Strong dollar policy is still in effect.
but, but, ... there is no 'inflation'. Only your coffee is becoming more expensive, smaller and shittier (robusta seems to have that extra diuretic effect some argue) as robusta beans supplant the arabica that your father and grandfather drank. And let's not forget the cost structure also silently progressing through farming, corporations, small businesses, etc.
But the 'mainstream' media tells us we all want & love Obamacare now, when its full cost impact has yet to emerge & apply. And this is all in the face of tremendous deflationary delveraging, no-cash-velocity environment.
What, me worry!? .... Nah, not when Chairman Bernacke is 'smooth' in fornt of mandated congressional hearings .. that's all we needed.
IP Freely.
Oil banksters have backed off a little now as their slow austerity of Europe is implemented in the US.
And, remember, this is with "CHEAP" gas. What happens when our energy is derived from expensive wind, solar and other green sources. PHucked.