Monday, May 26, 2008

Black swan on the horizon

Fuel Price Shock Coming

Gas prices are set by purchases that are forward contracts by suppliers. These contracts are one or two months ahead. That means that, when the newer contracts start to come into effect, gas prices will start to reflect this $120/130 oil. That’s this summer. A few months from now, it’s estimated that gas prices can reach $5 to $6 at that point.

Posted by sold 2 rent 1 @ 01:30 PM (1413 views)
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11 thoughts on “Black swan on the horizon

  • sold 2 rent 1 says:

    My guess is that oil and pretrol will carry on spiking higher into June and maybe July and when it is clear that CPI and RPI are out of control, IR rises will burst the bubble leaving western consumers with higher food, energy and mortgages.

    The economic chaos is set to go to the next level.

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  • markj69 str05 says:

    Scary, but probably true.

    It’s more than a little disturbing to think that the whole economy will crumble, and everyone will suffer with increased cost of living before we can afford to become home owners again. I wonder what we should expect in a few years time?

    The world’s a changing place, and how on earth you model in all factors to predict future events is seemingly impossible. Current events could have and should have been predicted better than they were (By the decision makers I mean)? And have they learnt anything to help in the future? I guess we’ll have to wait and see.

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  • Western governments are caught between higher IRs (to save their fiat currencies) or high inflation (which may destroy their fiat currencies). They are likely to choose the path that leads to the least civil unrest, which will probably be higher inflation and low IRs. If the UK was serious about inflation and defending the £, IRs would probably have been raised by now. Instead, further lowering is possible.

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  • Actually it’s simple to draw a graph comparing oil prices to petrol or diesel prices. The graph would show a 1-2 month time lag between oil prices and pump prices. Based on oil at $130-135 a barrel and the current £/$ ratio, we should soon expect to pay an average £1.40 a litre for diesel. The current figure is £1.25 a litre. As the article states, sustained high oil prices will eventually feed into high pump prices.

    The roads seem quieter this bank holiday weekend….

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  • sold 2 rent 1 says:

    Hyperinflation v deflationary depression.
    We will know which way it will go within 12-18 months.

    The next turning point in Armstrong’s model is in April 2009. After then it is all downhill until summer 2011.

    Meanwhile Calleman/Lungold’s fifth night destruction continues its build-up, and my interpretation is we shall see a big change of world consciousness around 6 July 2008. The focus of this change in the EU and US will be economic and political.

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  • planning4acrash says:

    S2R, how do you think gold will respond to deflationary depression? And are you actually suggesting that money supply could go negative?

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  • Over 2 years ago I sat down and worked out a cost of living comparison and tax deductions in relation to my earnings(with future estimates). That was it — no point whatsoever in carrying on as I was. I sold up and came over to Cyprus for a few years before my retirement. Where I will consider my retirement plans.
    These energy costs,food costs and the dropping value of sterling are having severe consequences on peoples’ standard of living in the UK.
    This joke CPI is purely to avoid paying real cost of living rises in line with pensions etc. They are basically taking the mickey. The joke is well and truly on us all.

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  • congratulations and jubila . . . stop it Cliff

    no, no, no,

    congratulations to everyone today for staying mostly clear of the myth of party politics

    avoiding going down that cul-de-sac

    most days the input from common purpose and their ilke on this site is beyond overwhelming

    we can’t fight it here, we are being monitored and underminded

    two reasons why I might not be around here much longer – shame most of us are good people.

    Too many of us are good sheeple. -http://uk.youtube.com/watch?v=GZxCfVHWtM8

    too much to learn to quickly

    they have us sussed we must adapt – that will scare the sh!t out of them

    sorry I’ve been at this a long time.

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  • sold 2 rent 1 says:

    P4AC,
    Gold should do well in either case; until we have the end of money that the singularity brings.

    Malct,
    I am down your way in Devon at the end of June for a week
    By then the common purpose boys will be in full panic mode that their world is crumbling

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  • planning4acrash says:

    But, if money crumbles, then, gold will be worth nothing in cash terms, coz there won’t be any, tho, gold will still be exchangeable with real things? Tho, I am concerned about bullion vault.

    Malct, sounds like you need a holiday!

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