Oil @ $150 dollars a barrel

[shadows]

I cannot understand the chart that shows only about 30% compounded inflation over the 1940-2007 area.  I cannot understand who would publish such a facts.  In 1940 gold was pegged at $20 now over $900 and the currency was issued by government and fed banks in silver certificates now it is only a mass production of a paper promise.   Politically we encourage inflation as it decreases the wealth of the poor and increased the wealth of the rich.  

In the postwar area one had to pay 20% down in cash on credit purchases if I remember correctly.  

I have a check lying on the desk for natural gas production.   The wellhead price that was paid in the 40's and in today's wellhead market, is many times the 30% compounded inflation rate of the chart.  In our wobbling economy one must admit that all barters of exchange equalize themselves and are relative to each other.  

A three wheel car was developed in a friend's machine shop.   It was electric driven with a small Honda engine that drove a standby generator to recharge the batteries if they failed away from home base.  Senators looked at its performance and said "we will look into it."  The last time I saw it it was suspended from the ceiling of a building.      

[cannon_fodder]

First, I appreciate your effort in making your post easier for everyone else to read.

Second, inflation on several commodity items is up way more than the average.  Inflation is the value of currency as a whole, so for the increase in Gold there is an offsetting decrease computer equipment, and so on.  The NET result is a fairly low rate of inflation (not sure if that chart is compounding by period or not).  

The data from the chart appears accurate by all other sources:
http://www.inflationdata.com/inflation/inflation_rate/HistoricalInflation.aspx
http://www.miseryindex.us/irbyyear.asp (really clear on this one).

[Conan71]

With diesel fuel now over $4.00 per gallon, we have not yet seen the end of what transportation costs will do to inflationary pressures on consumer goods.

One of our pipe vendors advised us yesterday that global demand for steel is about to create an allotment system and pecking order which is only going to drive prices on many manufactured items even higher.

I'm not trying to paint all doom and gloom, but for saying high gas prices are good is somewhat glib.  Sure it will get people to think about their consumption but it's not good for everyone and will disproportionately hurt the poor and working class.  It's also going to have a noticeable impact on travel and tourism this summer.

[FOTD]

Don't apologize for reporting doom and gloom if it's the truth.

[Conan71]

T. Boone was quoted in this morning's World as natural gas being at $14.00 per mcf by this summer and potentially at $20.00 per mcf next winter.  FYI- spot market price is around $10.50 right now.  Add rougly $2.00 to get your final delivered cost.

I can't see any reason for this other than energy traders escalating the prices by buying and selling to each other.

[waterboy]

quote:Originally posted by Conan71

With diesel fuel now over $4.00 per gallon, we have not yet seen the end of what transportation costs will do to inflationary pressures on consumer goods.

One of our pipe vendors advised us yesterday that global demand for steel is about to create an allotment system and pecking order which is only going to drive prices on many manufactured items even higher.

I'm not trying to paint all doom and gloom, but for saying high gas prices are good is somewhat glib.  Sure it will get people to think about their consumption but it's not good for everyone and will disproportionately hurt the poor and working class.  It's also going to have a noticeable impact on travel and tourism this summer.

This isn't the first time (post WWII) that our country has suffered through shortages, rising prices, and even allotments. Each time we survived and found better ways to do so. Really, it wasn't that long ago that I got my first job out of college directly created by the Fed's insistence that oil companies fairly distribute gasoline to jobbers and retail stations. My job was to monitor allocations of fuels and report such to the FEO.

Meanwhile full service retail stations that had gasl were refusing to sell gasoline to all but their best, recognizable customers. Long lines and fights ensued. But we made it ok and cars got smaller, more efficient and standards for mileage were established. Each of the other staple type manufacturers saw an opportunity as well and sugar, coffee and flour suddenly shot up in price. Even water was allocated due to shortages. Thus, the 70's was a difficult time for most of the country fiscally. That decade culminated with outrageous stagflation, worldwide political turmoil and even the monster volcanic eruption of Mt. St. Helen's. We had a war we were getting out of too that had enabled a tremendous influx of drugs to metropolitan areas.

No party or congress was able to stop this stuff either. Not Nixon, not Ford, not Carter. And I don't give Reagan much credit either (sorry Conan). It was just one hell of a decade that ran its course as we adjusted to new realities. But somehow we did okay and even prospered. I got a good job, bought a Corvette, my first house and my first child. Tulsa really didn't feel anything till '82. In fact someone noted here that the inflation adjusted price of gasoline only recently matched the price in 1973. So similar to today that it is uncanny.

[cannon_fodder]

quote:waterboy said
I got a good job, bought a Corvette, my first house and my first child

How much was your first child.  []

Higher prices leads to greater efficiency.  It's the American way.

[waterboy]

quote:Originally posted by cannon_fodder

quote:waterboy said
I got a good job, bought a Corvette, my first house and my first child

How much was your first child.  []

Higher prices leads to greater efficiency.  It's the American way.

He was the most expensive one. The down payment wasn't much, but the operating costs were staggering. Damn steep learning curve.[] Odd that his first job is in the oil industry and he seems destined to face the same kind of decade at the same age I did.

[shadows]

quote:Originally posted by Conan71

T. Boone was quoted in this morning's World as natural gas being at $14.00 per mcf by this summer and potentially at $20.00 per mcf next winter.  FYI- spot market price is around $10.50 right now.  Add rougly $2.00 to get your final delivered cost.

I can't see any reason for this other than energy traders escalating the prices by buying and selling to each other.

Is he talking about the removing the policy that curtailed the out-of-state shipment of natural gas.  Lets see the reason was that in selling natural gas to other states users it would lower the gas cost to our local users.

Does any one remember when the gas in the Osage production fields was a useless by product where one could tap the well with a line and use free gas.  The yard lights were ½ inch pipe gas flares that burned 24 hour each day.  

Then in the 40's we developed filters and gathered drip gasoline without lead.   So came the feds because there was no way to tax the drip gas.

The capping of the free gas shut down many whiskey stills in that area.   Another group of industrialist lost their jobs and DUI was very near unheard of .

[shadows]

quote:Originally posted by FOTD

Why doesn't the government just keep a royalty interest? It would amount to a lot more than a meager 1.8 billion dollars.

Most governments claim the mineral right below the surface and the airspace above the lands.   Our political system maintain the airspace is their domain but the government controlled bureaucracy, after claiming the surface rights belonging to the Native Americans and giving or selling them to favored elites, now exploit the citizens of what should have belong as part of the citizens domain thus controling subsurface caches of which they had a victors right to claim.  

It has taken us a century to reach in our republic democracy where the Romans made it less than 50 years before corruption and favoritism caused internal strife and it divided them in conflicting groups.

[bmuscotty]

I noticed the Phillips 66 at 71st and Lewis closed down last week. They always charged a few cents more for gas there. Is this a sign of things to come, closing down under performing or un-profitable stations with gas prices increasing?

[Conan71]

quote:Originally posted by waterboy

quote:Originally posted by Conan71

With diesel fuel now over $4.00 per gallon, we have not yet seen the end of what transportation costs will do to inflationary pressures on consumer goods.

One of our pipe vendors advised us yesterday that global demand for steel is about to create an allotment system and pecking order which is only going to drive prices on many manufactured items even higher.

I'm not trying to paint all doom and gloom, but for saying high gas prices are good is somewhat glib.  Sure it will get people to think about their consumption but it's not good for everyone and will disproportionately hurt the poor and working class.  It's also going to have a noticeable impact on travel and tourism this summer.

This isn't the first time (post WWII) that our country has suffered through shortages, rising prices, and even allotments. Each time we survived and found better ways to do so. Really, it wasn't that long ago that I got my first job out of college directly created by the Fed's insistence that oil companies fairly distribute gasoline to jobbers and retail stations. My job was to monitor allocations of fuels and report such to the FEO.

Meanwhile full service retail stations that had gasl were refusing to sell gasoline to all but their best, recognizable customers. Long lines and fights ensued. But we made it ok and cars got smaller, more efficient and standards for mileage were established. Each of the other staple type manufacturers saw an opportunity as well and sugar, coffee and flour suddenly shot up in price. Even water was allocated due to shortages. Thus, the 70's was a difficult time for most of the country fiscally. That decade culminated with outrageous stagflation, worldwide political turmoil and even the monster volcanic eruption of Mt. St. Helen's. We had a war we were getting out of too that had enabled a tremendous influx of drugs to metropolitan areas.

No party or congress was able to stop this stuff either. Not Nixon, not Ford, not Carter. And I don't give Reagan much credit either (sorry Conan). It was just one hell of a decade that ran its course as we adjusted to new realities. But somehow we did okay and even prospered. I got a good job, bought a Corvette, my first house and my first child. Tulsa really didn't feel anything till '82. In fact someone noted here that the inflation adjusted price of gasoline only recently matched the price in 1973. So similar to today that it is uncanny.

I certainly can't argue with your experiences.

One difference we have now vs. the mid-70's is increased global demand on diminishing resources.  Consolidation of various metal and energy companies has left fewer and fewer competitors.  Unions managed to break the back of the U.S. steel industry.  I've been told by a vendor that there are only three hot roll steel mills left in the U.S.

There's been a reputed steel shortage since late 2004.  Gasoline has now doubled in price since that time, the price of a barrel of oil has just about tripled.  It's been a lot to absorb in little over three years.  I noticed gas has gone up, yet again, to $3.49 today.

It's still not crimping my lifestyle, though I do tend to plan out my trips around town much more efficiently to minimize waste.

[shadows]

CF Quoted : Second, inflation on several commodity items is up way more than the average. Inflation is the value of currency as a whole, so for the increase in Gold there is an offsetting decrease computer equipment, and so on. The NET result is a fairly low rate of inflation (not sure if that chart is compounding by period or not) .

Since having lived through the 40's to the present (as a buyer) I have been unable to recall any  item  that has not inflated a
100% or more during that period just quoted.  Is it possible for  you to cite what items we buy and use today that does not have the 100% -+ inflation status?

The chart would have to be compounded as to the inflation rate if figured from zero of the given year it, would have include the additional increase from the previous year.

[cannon_fodder]

I understand that it is compounding, but it wouldn't seem like you could do it from the chart by period (compounding would be linear, 'averaging' inflation over a decade would be inaccurate).  I understand your comments, but I accept the challenge of figuring out what was cheaper back then - one item that is as cheap today as it was in the 1940's: a Tootsie Roll.

Also:

* a calculator has been reduced in price by a factor of several million percent. Costing tens of millions in the 1940's for the government to build, and being handed out for free today.

* Silk is cheaper today, with the availability of synthetic replacements

* Color camera's .  [1940's price $35-55, available today for $6 with a Dora the Explorer logo even]

* Portable Radio's

And I'll think of more!  []

[FOTD]

quote:Originally posted by bmuscotty

I noticed the Phillips 66 at 71st and Lewis closed down last week. They always charged a few cents more for gas there. Is this a sign of things to come, closing down under performing or un-profitable stations with gas prices increasing?

It's another Moody's.....from gasoline to jewels. Oh the irony.