time to panic? gas $4 a gallon by spring.

[Timkin]

I wouldnt be suprised at all.  That can only be devistating to many people, economically.   It will force many to greatly reduce their traveling, and energy consumption.

Spring is here and it did not make it to 4.00 /gallon , at least in most places in Florida, but it does not miss it very far at all.   At  6.00 /gallon, I cannot fathom  how monumentally it will impact people.

[JeffreyS]

At this point my number one issue for my business is how to reduce gas costs and the inflation of suppliers dealing with gas costs.

[JeffreyS]

Office coffee service, food, snack and beverage vending throughout Northeast Florida.  The business is divided into routes and route balancing to keep the amount of work on each driver equal used to be our primary objective in setting up routes. Now are number one indicator is number of miles for each truck. Both and more are a factor but Diesel  fuel costs are now king.

[JeffreyS]

I think fuel costs play a bigger part of the economy than the mortgage and credit crisis.  The fuel and other commodities inflation causes inflation across the board. My customers have been very understanding about price increases but they all have less employees, customers, or visitors at their businesses. Even if they keep all of their employees they seem to give them less hours so I sell less even if I do not lose any accounts.
(The bill collectors I service business's are booming!)

[Driven1]

btw...i think this is just a minor commodities correction...i would not be short gold now.  the economy is not recovering anytime soon. 

ps - one more prediction:  oil won't go below $95 again this year.

gold ETF 'iau' (which is composed of gold buillion) is up 5.7% since April 1st closing price.

[5400again]

no need to panic.....unless you need to panic biofuel is your answer.  I worked at BK and let me tell you, there's enough oil from frying fries to fuel you for a long time.  I'm looking into the conversion.

[Jason]

You have to buy a diesel first.

[gatorback]

 Henny Penny the sky is falling, or rather oil is over $114 a barrel.  Mark said prices went up 10 cents over night.  I never notice, I've got no cash for gas.

[fsujax]

Very soon we will see those prices around town.  It is already $3.55 (regular) at the shell downtown.

[RiversideGator]

[Midway ®]

(Empty post)

RG, I agree 100% with you on this!

[RiversideGator]

 

[RiversideGator]

Commodity Bubble to soon burst?

Commodities Bubble Will Burst Soon     
Tuesday, April 08, 2008
Knight Kiplinger

Knight Kiplinger, editor-in-chief of The Kiplinger Letter, says that commodities prices have been driven up in a speculative mania, and what goes up must come down.

Another bubble will burst soon. But this time, it’s all for the better.

Commodities are unsustainably highâ€"way out of whack with supply/demand dynamics. And the day of reckoning isn’t far off. The froth in oilâ€"about one-quarter of its current $105-a-barrel price on the futures market. Copper is a good 35% above logical levels; platinum, 30%; tin, 50%; nickel, 25%; zinc, 20%, and corn, 15%-20%.

What’s behind the commodity bubble? Mainly investors chasing high returns. They’re pouring cash into commodity futures, because other choices seem less attractive. The Standard & Poor’s 500 lost 10% in the first quarter, its worst quarterly performance since 2002. Interest rates keep falling, and the dollar is hitting record lows. And no one can guess when home prices might hit bottom and rebound.

Commodity gains add to herd behavior. With every price spike, more investors jump in, afraid they’ll miss the score of a lifetime. Hedge funds and other big investors do most of the speculating. But more little guys are also getting in on the act by buying exchange traded funds. ETFs trim the risk some by diversifying, are easy to get into and out of and have a much lower admission price.

Our best estimate is that the balloon will deflate by midsummer. A number of factors could do it in: A cut in worldwide commodity demand, big stock market gains, a more stable dollar, or tame inflation signals. Prices will drop by about 30% if all these factors come into play at once, but declines will be smaller and gradual if signals are mixed.       

Oil will slide to $85 a barrel, with a smaller reduction at the pump, because risk is still a factor. In any case, the bottom isn’t going to fall out of the commodities market. Supplies are tight, and demand for many products will remain high, particularly with growth in China and elsewhere.

One glaring exception to the commodity bubble: natural gas. Industrial, heating, and other demand is sure to remain strong, and prices, currently around $9 per million British thermal units, may top $10 per MM Btu next winter. Natural gas supplies are roughly adequate for normal weather, but harsh conditions are likely to cause real stress. Fading quickly: Hopes that liquefied natural gas (LNG) will increase supplies. LNG is going to Asian and European buyers, who are outbidding US ones.

The bubble’s pop will be good for businesses and for other regular buyers of commodities. So, put off major purchases if you can. The pain will be limited to big speculators and small investors who failed to diversifyâ€"plus producers who’ll lose outsize profits.

http://www.moneyshow.com/msc/investors/article.asp?aid=GURU-14449&iid=GURU&scode=008542

[Driven1]

my prognostications on commodities...

I would say Oil is due for a major correction...at least back down to $95/barrel levels (a 20% decrease).  I could also agree with platinum, nickel and zinc.  Corn - nope...not until the biofuel policy goes achanging.  Wheat - nope...not until the food riots stop and the biofuel (see corn) policies change.  I would 100% completely agree with the natural gass boom going to continue...though, I doubt that their is as much money to be made in LNG.  Fertilizers - nope - gonna continue through 2008 at least.

Btw...I have found to look more to Barrons than Kiplingers for the best info.  IMO, Kiplingers is kind of like "Money" magazine or "SmartMoney" - just a tad better.

[RiversideGator]

(Empty post)

RG, I agree 100% with you on this!

That's strange.  I see what you mean now.  At my office, I could see the cartoon I posted.  At home, it is not visible.  Oh well...