Jammer -
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Originally Posted by Jammer
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Am I the only person that noticed our American/World Recession all started after a few weeks of over $4.00 (USD) gas prices? It is my family's belief that high fuel prices is exactly what got our economy in such a mess! I know the media never says that, but I happen to feel very strongly about the high cost of fuel sending the economies of the world into a tail spin. I never bought the housing market started it- except for the fact that many people were using their credit cards to fill up their cars/trucks just to afford to drive to work and back, and when they tried paying off their credit cards they could no longer afford their HOUSE!
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I agree that high gas prices was one part of the fall. In my ideal world, gas prices would increase *gradually*, so that the auto companies and general economy would have time to adapt (aka adopt "kei car" policies and such). How come Europe and Japan are able to function with gas prices that have been historically much higher than ours?
In terms of bubbles, I look at it this way :
Internet bubble -> Housing bubble -> Gas price bubble (with help from war)
Part of the economic bubble was people borrowing against homes they already owned or had cheap mortgages on. I see so many luxury cars in front of dumpy homes, it's unbelieveable. I should start a photo collection of luxury cars that imply people living beyond their means.
The way I look at it, the people that have the money are just running from bubble to bubble, skimming the profits off, and leaving everyone else with the (empty) bag. I heard that even today, the toxic debts are being "cleaned up" and put back on the bank ledgers. They're still toxic, but they've already become "acceptable" again. Welcome to Housing Bubble II (ha ha, HB-I was not the housing bubble to end all housing bubbles).
Another factor in the price of gas are all the wars we've been fighting. This allows for speculation to run rampant. You can make an argument that debates the current high cost of fuel versus the *real* cost of fuel. In my opinion, when you include our military expenditures in the Middle East, the real cost is $10 a gallon or more. In the short run the current cost of fuel does damage to our economy. But in the long run this will force us to conserve and will allow alternative energy economies to become viable.
CarloSW2