Re: $4/gal gasolne?


<TomAldrich@xxxxxxxxxxxxxxx> wrote in message news:463124dd$0$6587$9a6e19ea@xxxxxxxxxxxxxxxxxxxxxxxxxxxx

On 26-Apr-2007, "fyis" <fyis@xxxxxxxxxx> wrote:

> What makes me mad is, during the last election it was voted to take > 100%
> of
> the gas tax and use it towards roads and one thing we were told is that
> would eliminate the need to raise the gas tax. But sure enough we now
> face
> tax raise's at the pumps.
> What a bunch of bull***.

No, what you now face with the inception of better hybrid car gas mileage,
and lower
overall revenue being collected for highway repair, is substituting the
increased gas
tax with a usage tax; you will taxed based on how many miles you drive a
year,
regardless of the mileage you get.
http://blogs.cars.com/kickingtires/2007/04/more_miles_bett.html

While I'll agree with your above along with the the price of gas going up
increasing the profit for the corporations because of the loss of gasoline
sold, this is not the situation in Minnesota as of yet. The election for
this gas tax thing was only last Novenmber and I don't think we've had that
large of an influx of hybred cars.
My bets will be regardless of who is elected we will see huge jumps in the
price of gas at the pump as well as increased yearly registration taxes and
it will not matter who is elected.
We already are going to see food go up these next few months due to corn
being grown for gas. I will not be surprised if Gas is not atleast $5.00 a
gallon next summer.

Livestock producers are cutting back their herds until they figure out where the price of corn is going to land.

Corn closed at 3.75, today. That's very, very high. In 2005, it was generally about 2.30 per bushel (Figure an overall average of 130 -150 bushels per acre.)

A good many of those ethynol plants are coming on line, now. And the demand for corn is only going to increase, EVEN with increased production. With the increase in corn production, that means that there will be correspondingly less in grains and soybeans. So, we will see a jump in food prices across the board.

That, also means, there will be less commodities to export. There's a lot of slack in the system, but other grain producing countries will export more, for a while, but ONLY the countries that are exporters AND close to energy self-sufficient will benefit in the longer term. So, I'd expect our balance of trade to take a hit or two. (Somewhat TIG, "Dammit, let's annex Canada, now. They're not only a food-exporter, they're an energy exporter, too")

Increasing costs of basic food commodities are also a prime ingredient for inflation. Even if fuel prices remain relatively stable, the food prices are likely to add increasing destabilization pressure. Current projections are a 3.5 % increase in food prices, this year. (I wouldn't be at all surprised to see 4% raise)

And that increasing inflationary pressure means the Fed will start tightening the interest rate. (If anyone still has an adjustable rate mortgage, I'd sure think about converting that, if you can't reduce it significantly). I, personally think, that Katrina acted to stabilize the home building market. While there was considerable downward pressure on new home prices, the devostation along the entire coast, pushed supply-prices higher, and served to couneract the downward pressure.

Increase food prices, especially in Mexico, will only fuel illegal immigration to the US, and increase pressure for more draconian anti-immigration legislation.

But the most un-expected of consequences?????
Some farmers are actually making so much money that they're being forced to pay income taxes. This will not last. This will NOT last. If a farmer has extra money, they buy more land. So, I look for the agricultural land prices to begin a slow increase over the next couple of years. And this will be environmentally bad news. Literally millions of acres of marginal ground was allowed to return to "natural" conditions during the XXth Century. (That's were all those forests came from.) The Tragedy of the Commons will kick in soon.

James...
THANK GOD for indexed retirements....

James.....


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