Hullo All,
Spoke to a person last night who said that for each recession in Oz there has been a sharp petrol price rise immediately prior to it.
This person also said there will be a property bust (presumably a more severe downturn than we are currently witnessing) in tandem with this imminent recession.
This person has been working as a property valuer all over Qld for a long time and is a long time and significant prop investor, so I felt i should take note of these unwelcome and distasteful predictions.
I can see how the petrol price will affect highly geared homeowners on the fringes who commute long distances, and I can see how it is like a int rate hike in that the money just “disappears”, and there is no plasma screens or shiny baubles to show for it!
What do you all think?
Sorry to sound so depressing!!
Has anyone else heard about the petrol connection?
Anyone of long standing also predicting dire consequences?Giddo
http://www.standrewsplace.com.auKNOWLEDGE IS POWER
Interesting topic, Giddo.
Even though I am far from being a homo-economus, I will post my view here.“Rising petrol prices are not good for the economy”, so Costello said, I remember reading last month.
Ands experts said that every 2 cents increase in the price of petrol adds 0.05% to inflation.
I do not know what to believe- but I can imagine that about the same can be said if oil prices would be falling, e.g. when oil prices are low projects will be postponed or terminated; oil companies will be spending less and shrinking, costing jobs; oil companies fusing, blah blah.
Everything relates to everything in life, in economics, so there must be a connection between petrol prices and recession/inflation, but not merely that- there are, and always will be, other influences as well. Chain reactions, domino effects, we have heard it all.
Every time somebody says that ‘this’ is connected to ‘that’, ‘this’ relates to ‘that’, yes they will always be right because everything relates to everything- it is just what you search for and you will find the connection.
We all just have to work towards a future that makes us less dependent on oil, this must be our priority.
It is perhaps a good wake-up call for humanity to have an increase in oil prices. It may force us towards taking more action towards promoting/producing energy alternatives.
That’s why [medieval] I [medieval](just protecting myself here hehe) also think that the govt should not be responsible for artificially keeping oil prices down- if they do, people will never reduce their oil consumption and never start thinking greener. Also, wouldn’t the tax payer be paying for it all, anyway, somehow?We need to start to think greener faster and now is the time to get more serious about sensible energy.
Hehehe, why fly to the moon “againâ€, costing (how many?) millions/billions when we may not even be able to drive around in cars on earth in the (near) future? Now- THAT will have a big connection to a recession! TSK if there’s even TALK about having ONE car-free day like they have in the European countries, there’s some panic in the air!Celivia
Try to get a copy of “The Bubble Boom” by Harry Dent. Very interesting read.
CATA
Asset Protection Specialist
[email protected]Originally posted by Cata:Try to get a copy of “The Bubble Boom” by Harry Dent. Very interesting read.
CATA
Asset Protection Specialist
[email protected]Yeah interesting read; but Harry’s dow 40,000 is running out of time eh?
Rising petrol prices may be good for investors with inner city IP’s or IP’s close to public transport. As petrol prices rise those people who have to travel long distances by car will want to move either closer to the city or near public transport. This effect may see a drop in rural prices and an increase in city prices. At the moment there is an oversupply of inner city apartments and prices have been dropping substantially but with the increase in petrol prices this trend should reverse. Petrol may easily hit between 1.50-1.70 before flattening out over the next 6-9 months. This is going to hit the economy and some industries hard in many ways, especially tourism and businesses in the rural sector.
C2
C2
Oooooooo $1.50 per litre, you say! Ooooooooo
It’s been over $1.45 in the Pilbara for over two to three months now.
Oooooooo
Talking Economic trends – what about the ginormous development in China, Korea and, to some extent, in Japan???? Iron Ore exporters are going nuts with expansions. they can’t get the stuff out of the ground fast enough! China is buying everything with iron in it, scrap metal, low grade/high grade ore, old cars/trucks anything and everything.
One would hope that that would have a balancing effect – even if it is only a little bit!
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas EdisonC@34, yeah, the first load of Chinese cars have been exported to European countries already- first The Netherlands, from there they’re going to bring them into France, Belgium, Spain, I believe. Apparently they think that they’re gonna be very populair- they’re cheap cheap cheap, small (call it compact :+) ), light cars, but I’m not sure about these being more economical in petrol usage than other cars of the same size. I thought they look a bit crappy though.
Celivia
Originally posted by Celivia:the first load of Chinese cars have been exported to European countries already- first The Netherlands
Are these the cars ? http://landwind.bootnetworks.com/
http://www.autoblog.nl/pivot/archive.php?c=Landwind&w=&t=
Cheers
JTHe link doesn’t seem to work, the.j, all I get are symbols. Can’t remember where I found the info and picture of the cars, but if I do find them, I’ll paste the link in a post here.
Celivia
Ozzies think petrol is expensive and think that’s bad because we are on the cost side of the equation.
If you think about it, there are quite a few chaps who think this is absolutely fantastic as they are on the revenue side of the equation. There will be large and powerful resistance to stay in this regime…or improve it further.
In the short to medium term, these green alternatives are mickey mouse and not nearly of a scale that is relevant. The transportation energy consumption is immense. Until the voracious US domestic and industrial market does something to rectify their habits, nothing anyone else does will count for a hill of beans…we are just too small and totally irrelevant to make a difference.
Production of crude oil and natural gas is still the # 1 game. The Ozzy Fed Govt already gives 125% tax deduction on exploration costs for companies willing to try and find /produce more. I think the key is to find and produce more and reduce our dependence on massive value imports.
If not, those floating supertankers out there on the seas, whose contents are bought and sold many times over (sometimes up to 17 times) by ‘speculators’ and traders in New York and London. If you could kick those leeches off the bandwagon…they produce nothing and do nothing other than shuffle paper and create this waffle called “market sentiment”, and of course add $ to the cost of the load, the price of oil would be back around it’s normal 35 to 40 region.
If the US would back off and get out of Iraq, and allow them to bring on stream their 3.7 MM/day production, that would drop the price of crude enormously. With them spending a Billion USD every week having US carrier groups protecting the Straits of Hormuz…I can’t see that happening anytime soon. God Bless America.
If you are unhappy about fuel prices, call up Johnny Howard’s boss here in Australia, Mr Tom ‘something’….the US Ambassador, and have a whinge to him. He’ll tell you…
“The US is working for the good of all Ozzies and don’t you worry your pretty little head about it…we’ve got it all figured out. Please turn on CNN so you can form your own special brand of opinion…you’ll soon come around to our way of thinking.”
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Heehaw… best post this week.
F.[cowboy2]As a net energy exporter I should think we’d be worse off / more inclined to recession should energy prices fall significantly. Yes, we’re a net importer of oil (~20%?), but when gas & coal are considered we actually profit from higher prices, and all forms of energy tend to move together in price…
Check out the new wave of cars soon coming into production..drive into the petrol station, past the bowsers, get the compressed air hose..and you’re away..
hey, maybe rather than a small jerry can in the boot you can carry a bicyle pump if you run out??
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorYeah interesting read; but Harry’s dow 40,000 is running out of time eh?
[/quote]
He has untill 2009/2010. I guess time will tell.
CATA
Asset Protection Specialist
[email protected]Originally posted by Dazzling:
….whose contents are bought and sold many times over (sometimes up to 17 times) by ‘speculators’ and traders in New York and London. If you could kick those leeches off the bandwagon…they produce nothing and do nothing other than shuffle paper and create this waffle called “market sentiment”, and of course add $ to the cost of the load, the price of oil would be back around it’s normal 35 to 40 region.Hmmmm as one of those “leeches” I feel compelled to offer some defence for my lowly colleagues and I….
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Hmmmm I don’t seem to have a defence! LOLPerhaps offence is best defence. Why is it OK for real estate speculators to push prices to absurd heights? Why is it OK for share market speculators to increase the value of your super?
Why are oil traders leeches?
It will be the traders who short the crap out of oil, when sentiment turns and push the price down! Will we still then be leeches?
Look further afield for the true villains Darryl.
Cheers
…and perhaps you need dig a little further Wayne… a large part of the oil price rise story is inflation (oh yes, I’m on my favorite soapbox again!). The total money supply here in Australia has doubled in less than 10 years, mostly created by debt and most of that debt has been incurred in the pursuit of real-estate riches… If you double the supply of money without doubling domestic production, you are in effect halving the value of all previously existing money. Voila, in time, other prices will rise in kind. Australia, the United States, Britain etc have all been massively inflating, and this is coming home to roost. Of course, most economists will point to increased demand for oil from China and India as catalysts to the recent demand/price increases, but these countries are only growing because/b] we ‘westerners’ have so much funny money to buy their product with.
It’s all the same story:
^ house prices
^ base metals
^ precious metals
^ stock markets
^ energy costsAnd why? Because:
^ debt
^ money supplyResulting in:
^ inflation.So who wants a really hot tip on a great time to fix interest rates on their debt? I’m no financial advisor, so I can’t really say. You do the maths.
And for what it’s worth, I don’t feel any great guilt for my contribution to rising petrol prices (yes I have and will continue to profit from shares in oil producers & explorers). I didn’t cause this inflation after all!
One more thought – what is more financially challenging to a young couple/single/family looking to settle down today compared to 5 years ago – an extra $30 per week for fuel or the extra $200 per week they’ll need to find to afford a modest habitation?
Why are high house prices good (fullstop), yet high oil prices bad (fullstop). I can see plenty of good coming from high petrol prices, such as the removal of unnecessary gas-guzzling 4wds from suburban streets, a reversal of the freeway slowdown of the last few years, better environmental outcomes, more funding for oil-energy substitutes… I could go on and on. There’s also the lovely profit element…Goodnight, F.[cowboy2]
PS – Who was laughing at me so recently for being a practising gold-bug? Gold being the ultimate inflation-beater of course, and now up nearly 20% for the year….
One more thing – wasn’t today the latest official buy no petrol (aka ‘stick it up your ____’) day. How’d that all go then? I bought some, and yes, it was down to 132.9c from 137.9c early last week. Ripper.
F.[cowboy2]
Originally posted by foundation:…and perhaps you need dig a little further Wayne…
Oh no! Not at all! I fully subscribe to the same world view as you.
In fact I was on here in late ’03 talking about this stuff.
Just sitting back now and watching what happens next.
Originally posted by foundation:
PS – Who was laughing at me so recently for being a practising gold-bug? Gold being the ultimate inflation-beater of course, and now up nearly 20% for the year….Well it definately weren’t me…no way!
Cheers
Oops, sorry, that really wasn’t directed at you, I was just ranting again…
When I said you need to dig a little further, I meant that not only has real estate speculation pushed house prices higher than they deserve to be, the associated borrowing/money creation is directly linked to higher petrol costs.The gold comment was directed at, well, anyone really.
Back on topic – the price of crude oil was down about a US$ overnight. The financial press related this to the downgrading of hurricane Rita to Grade 4. I think it was more to do with a strengthening US$ following yet another interest rate rise and comments suggesting there were more to come. Oil in Aussie dollars is roughly steady, maybe down a fraction, but certainly nothing for motorists to get excited about.
Cheers, F.[cowboy2]
Hi Foundation, whats wrong with gas-guzzling 4wds. With all the lunatics on the road I feel a lot safer about my family being in 4wd that can stand being hit at a speed in excess of 80Kmh and still walk away after the accident. For me a 4wd is another form of insurance for the family. I also think that my diesel uses less fuel than a lot of V8s or are they the next next target?
C2
Rich in happiness and money is better than rich in money with no happiness.
Hi C2,
I used to think the same as you (or as you have just stated) – until I was shown a number of reports that showed (from memory) that percentually (if that is a word) the accidents in 4WD are nastier and the passengers are more likely to have more serious injury than those in pedestrian cars. Blew my socks of, – something to do with the drivers attitude! “I drive a 4WD and so I am safer and can do more …. speeding…..more rough driving……. more things in the rain …..” etc – you get the point. I’m by no means saying that you or all 4WD do this, but proportionately there is evidence of higher risks being taken by owners of 4WDs.Food for thought!
Most of the 4WD around where I live are Diesel (like yours) but they are geared for actual “off-road-driving”. By that I mean they aren’t geared up to accellerate quickly or hugg the road better. Quite the opposite, they have raised chassies and bigger wheels to cope with some of the rough Off-road terain so you don’t want to be screeching from 0-100 in under 10 seconds!
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas Edison
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