24 May 2008
Too Far Too Fast
Posted by Joy Bischoff under: World Economy .
Guest Blog by Peter Anderson
The results are ‘alarming,’ says one tabloid…“the most savage increase in living costs for a generation.” What did the papers actually find? The Daily Express came up with an increase in consumer prices over the last 12 months of 11.5%. The Daily Mail ’s tally came in at 15%. That’s getting to be serious inflation. And we suspect there’s more coming. And less, too.
A news story in the Financial Times tells us something very interesting. “The gap between input prices and what can be passed on to consumers is at its widest for 20 years.” For example, a 4-pint bottle of milk has gone up 16.5% in the United Kingdom. The price of milk from the farm has soared nearly three times as much – 45.8%. Or take bread. Wheat is up 56.9% over the last year. But a loaf of bread has only gone up only 8.5%. Crude oil is 62% more expensive today than it was a year ago. But a can of oil…or petroleum products generally, at the retail level…are up only 25.4%.
What does this mean? Probably two things. Maybe more. First, input prices have jumped so fast retail prices have not been able to keep up. It may also mean that retailers don’t think the raw output prices are permanent…or that they, the retailers, can afford to pass them along without losing customers. It may also mean that commodity or wholesale prices have gone up too far, too fast.
One thing is certain, the gap can’t last. The retailers can’t buy oil 62% higher and sell it only 25% higher – not for long. Either the price of crude comes down…or the price of retail petroleum products goes up.
Which will it be? Inflation or deflation? More inflation at the retail, consumer level…or a collapse of commodity/wholesale prices?
http://us.ft.com/ftgateway/superpage.ft?news_id=fto052120080035560790&page=2
11 Comments so far...
Sharon Anderson Says:
24 May 2008 at 10:17 am.
RE the cost of gasoline:
I like what Angela Rogin said yesterday (23 May 2008 “. . . . What has congress done about the problem? Refused to allow domestic drilling. We need to all point out to our congressmen that we are holding them responsible.”
What about HR 2415? The Affordable Gas Price Act, Sponsor (not surprisingly) Ron Paul — Summary–To reduce the price of gasoline by allowing for offshore drilling, eliminating Federal obstacles to constructing refineries and providing incentives for investment in refineries, suspending Federal fuel taxes when gasoline prices reach a benchmark amount, and promoting free trade.
Learn more: http://www.govtrack.us/congress/bill.xpd?bill=h110-2415
Like Angela says we need to hold our Congressmen responsible. What would happen if all of us and ALL who are concerned about the cost of fuel contacted their Representatives and told them we hold them responsible and asked them to cosponsor and support this bill.
Wake up and rise up, America.
Cameron Says:
24 May 2008 at 11:18 am.
Very good point. Instead of everyone running around yelling about what to do and who is at fault, we need to focus on Congress and let them know we think they are the biggest problem.
Sharon Anderson Says:
24 May 2008 at 11:25 am.
OK so I know this is redundant, and I apologize that it is long, but I want to share with you the email that I just sent to dozens of people (after I sent the email to my Congressman using the capwiz link). You guys might want send it out as well.
Subject Line: What we can do about the cost of gas.
RE: The High Cost of Gasoline
Yesterday a friend asked, “What has congress done about the problem? Refused to allow domestic drilling. We need to all point out to our Congressmen that we are holding them responsible.” What a concept!
What about HR 2415? The Affordable Gas Price Act, Sponsor (not surprisingly) Ron Paul — Summary–To reduce the price of gasoline by allowing for offshore drilling, eliminating Federal obstacles to constructing refineries and providing incentives for investment in refineries, suspending Federal fuel taxes when gasoline prices reach a benchmark amount, and promoting free trade.
Learn more: http://www.govtrack.us/congress/bill.xpd?bill=h110-2415
We DO need to hold our Congressmen responsible. They won’t pay attention if they are contacted by only one or two constituents, but what would happen if all of us and ALL who are effected by the rising cost of fuel contacted their Representatives and told them we hold them responsible? Let’s ask them to cosponsor and support this bill. They should receive so many calls, emails, and faxes that they can’t ignore us.
Wake up and rise up, America.
Please 1) contact your Representative and 2) encourage others to do likewise. You could ALSO contact members of the committees to which this bill has been referred and ask them to take immediate action. Go to the link above then click on the names of the committees for lists of the members.
FAST AND EASY: Go to http://capwiz.com/jbs/issues/bills/?billtype=H.R.&billnumb=2415&congress=110 and enter your zip code. At the bottom of the list of issues select “compose your own letter” and then insert something like this:
Dear Congressman:
As my Congressman (or as a member of the ____ Committee) I hold you responsible for the high cost of gasoline that is adversely affecting our country. This is a crisis that requires immediate action. You have the power to do something which will help your constituents and all Americans (and which will increase the probability of your being reelected.) I urge you to cosponsor and support HR 2415, The Affordable Gas Price Act, and look forward to hearing from you about what action you have taken to address this serious problem.
Sincerely,
Pickles Says:
24 May 2008 at 11:42 am.
Good idea to have somebody to focus our anger at. Congress!!!
Jan W. Says:
24 May 2008 at 12:45 pm.
Does anyone else find it strange that a lot of articles talk about some economists saying things are getting better or shortly will? Especially with the housing crisis. How can things get better when the cost of living is getting so high that it is getting harder and harder for a lot of people to make there mortgage payment? It doesn’t make sense to me.
M.G. Says:
24 May 2008 at 1:56 pm.
Yup
Stumpy Says:
24 May 2008 at 2:09 pm.
Yup? Come on MG. Show a little class ya boot licker. Thats yes maam to you. Didnt yer mama teach ya no manners?
Benjamin Says:
24 May 2008 at 2:24 pm.
All hail the master elocution teacher, Mr. Stumpy.
Stumpy Says:
24 May 2008 at 2:30 pm.
Hey ya wippersnapper, y’all takin my name in vain?
Benjamin Says:
24 May 2008 at 2:32 pm.
never
Cavetrollhead Says:
25 May 2008 at 11:47 pm.
Mommy?!!
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