p.s. others feeling the vibe at the oil drum
9/28/2005 11:05:00 PM | Author: baloghblog

Ianqui writes:

For example, peakguy notes on Peak Oil NYC today that the reason that people—and the economy—seem to be putting up with $3/gal gas is because they don't have another choice. As the Slate article that peakguy refers to argues: "The rule of thumb in economics is that people react to price increases only when they can turn to substitutes...people can't change the type of fuel they put in their cars, and they can't stop going to work."

If people can't stop using gas, what happens? Well, they charge it on their credit cards, of course. But this AP article reports that as a result of this credit card activity, Americans have fallen behind on their ability to pay off their credit cards. (In fact, this topic seems popular in the news today.)

"The rise in gas prices is really stretching budgets to the breaking point for some people," the [American Bankers] association's chief economist, Jim Chessen, said in an interview. "Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations."
Couple this with some other problems we've seen lately in the financial realm, and we should be scared.
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2 comments:

On 6:25 AM , sudhakar said...

Hi there, you have done a great analysis on Peak oil, I also thought about it for a long time and later found that people call it "Peak Oil", Iam from India, there is little or no awareness about it over here, and I feel there is nothing we can do about it, Have a look at my blog,it is not not in as much depth as yours.
Bye
Sudhakar

 
On 9:39 PM , Tim of Suburbia said...

I'm hearing the the CPI is way up, unless you take out FOOD and ENERGY! I think people are paying so much more for FOOD and ENERGY that they cannot pay for anything else, keeping the retail and other prices down. It's insane to talk about low inflation and exclude FOOD and ENERGY prices!!