Hey Gang,
Hows the summer going? Here, slow and not going out as much for the obvious reason, the price of gas. Even though its been a few months since the price has skyrocketed, everywhere I go its still the buzz and no one's finding it easy to live with. I heard from one friend that his friend who manages a rental car place was laid off. Not as many people are traveling, hmmm wonder why? Doug at Kaufmans radiator said his business is slow. Less driving, less maintenance, less business. I talked with someone who is involved with Lorain speedway and he said attendance is way down. Drivers are still participating but he noticed that before when a car went down for repairs it was back on the track the next week, now they are gone for three weeks. Lorain is doing all it can to fill the seats with different kinds of promotions etc.....
Big Al who is actively involved in the old car hobby wrote: "Hi Carey, I've been out, but not as much. Every cruise I have been to was down in numbers. Even the Buggin State in Erie had over 700 last year and less then 500 when I went a couple weeks ago. This was with perfect weather which does make a difference".
I was doing the math on how much it would cost to drive to Kentucky to pick up a friend who wanted to come up and stay for a month. When gas was about $1.20, which wasn't all that long ago, that trip of about 700 miles in the GoGo Bus that gets 15 mpg cost about $56.00. Now, its about $186.00!! So it looks like I will take my Lil' Lanos but it will still cost way more than it did before, $87.00 in a car the size of a large roller skate. What can you do.
We aren't alone in our struggle. We laugh that maybe we can go back to the horse and buggy like the Amish, oh yeah? In the News Herald June 30 edition was an article titled "Rising gas costs pinching wallets of the Amish, too". It stated a host of reasons why. Lack of tourism is one. Another is the cost of propane and diesel to run their stores. Keim Family Market said fuel costs are $8,000 per month, last year they were $4,000! Thats horrible!
You just never figure all the other things affected by this. Less gas sales, less taxes for road repair. Small independent gas station makes their money on snacks and pop sales. With the high prices most people aren't spending that extra buck which could force a lot of the small stations out of business.
Back to my plight with my business. I keep hearing, your prices aren't bad and we need the work done but right now things are a little slow call us again in a few months and see how things are.
But what do you expect? We kept voting into office the EGores of this nation. Also our habits didn't change and the dollar, oh yes the dollar. Look out below!!!! Globalism, environmental wackos, and liberalism thats how you spell CRASH?
And finally I do need to add this. Remember the problems I had with my rentals in Euclid? Well right now its tough for a lot of people who don't have money for repairs being demanded and for sure can't afford the extra permits placed on them. So what are cities like Euclid going to do when things completely tank? Will these cities confiscate people's houses and jail everyone for not adhering to those demands? These cities need to start taking into serious consideration all permits and added fees. Property and income taxes are one thing and are needed but if people are about to lose their houses the cities will have to rescind those added fees. Or will they?
What set off this long tirade? Jeff M. who is a truck driver sent me the article below. Not sure where he got it. He changed the title to "This is un real .. looks like my job will be gone ( if i even have one?) Read it and you will understand, this is getting very serious. If things don't correct themselves soon we may all be wishing for the return of $4 per gallon gas. Read the article and starting praying folks if you haven't been already.
CKM
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The predictions of $200 oil have made it to the front page of The Wall Street Journal. They have been hanging around in less prominent places, but now they gain some further legitimacy. According to the paper, "Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year." The Journal predicts this would push gas prices to $6 a gallon.
If gas goes that high, several industries will be toast. Airlines and auto companies are obvious. The bankruptcy courts will be filled to overflowing with their lawyers and creditors' counsels. The result could be one of the largest restructuring in the recent history of the US economy. Where the capital will come from to do this is anyone's guess.
The falling of the dominoes does not end there. Gas and oil prices at unprecedented levels may well push energy costs to 20% to 25% of the income of many middle class households. In regions where the weather gets particularly cold in the Winter, that number could go even higher. Consumer spending would be completely arrested. Retail sales would be damaged beyond all but the most negative predictions.
Any industry which relies on transportation, whether it is newspapers or forestry products, would face costs which could easily wipe out gross margins. The impact could be so profound that it could effect the way that some people get most of their daily news.
Oil at $200 would seize up the economy to the extent that virtually no industry would me immune. Fixing the problem could take a year, and, perhaps, much longer. The US has not seen anything like it and has no experience with remedies, which makes solving the trouble all the harder.
Douglas A. McIntyre
