Wednesday, June 04, 2008

Are we in the 70's again?

Astronomical gas prices, dive-bombing value of the dollar, record home foreclosures... ugh.

Today, the national average of regular unleaded is $3.98. In San Francisco, the average is $4.33 and deisel fuel is as high as $5.39!!!

I haven't seen any gas lines... yet

Federal Reserve Chairman Ben S. Bernanke highlighted in a speech yesterday, said that the falling value of the dollar can feed into inflation expectations, and that rapid price escalation, if sustained, "might lead the public to expect higher long-term inflation rates, an expectation that ultimately could become self-confirming."

"We're at the edge of the cliff right now," said Scott Anderson, senior economist at Wells Fargo. "It's still at an embryonic stage, like where we were in 1973 or 1974, not as bad as things were in 1979. But it could move in that direction if the Fed isn't aggressive."

"We are assuming that prices will continue to go up, not that they're going to level off anytime soon," said John Benko, president of Manko Delivery Systems, a Tampa company that offers ground freight, logistics and other services. His company has been able to pass on about three-quarters of the higher fuel costs to customers in the form of higher prices, with the rest cutting into his firm's profit.

So, crank up your Rolling Stones 8-track, put on your hip-huggers and pray that we don't see another round of disco music... Who will be our Ronald Reagan and pull us out of this mess?

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