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#4031

Iza

RE: Oil was killing us about the time this dortnuwn started. Every dollar spent on gas is a dollar not spent on something else, and also I think it might mess with the GDP numbers too. The spike in the cost of fuel was the spark that clearly put us in a deflationary pattern, in my opinion. There were all kinds of inflation claims running around at the time, but since we are talking about the price of a basic commodity, the only type of inflation we need to consider is cost-push. As the cost of fuel was going up, who was able to demand an increase in rates?1. Transportation? The transportation industry was probably most impacted, yet airlines and trucking companies raised rates very little. Fuel Surcharges were put in place on some trucking services, but the surcharge was quite small relative to the added cost. Airlines were not increasing rates. Pizza Delivery persons weren’t making more if anything less.2. Workers? No. There was not a better opportunity closer, nor could over-leveraged workers demand much from employers, who weren’t listening anyway.3. Gas and Oil made a lot of money. In part this was from the accounting costing principles.We can also look at this from a monetary policy perspective. There was this giant sucking sound of dollars leaving the country to what many consider to be terrorist friendly, oil rich countries, yet all that money leaving the country was supposed to be inflationary.Wife: Let’s go out! Somewhere Expensive.Husband: Sure.Destination: Local Gas Station Rate this comment: 0 0

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