Where is the US economy headed?

Gerald Celente, the founder of the Trends Research Institute gives RT's Marina Portnaya his predictions for the headlines of tomorrow. OWS movement, US presidential elections, economic embargo on Iran are among the issues discussed.

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From the NYT

Quote:

High Gas Prices Give G.O.P. Issue to Attack Obama

The White House is preparing for Republicans to use consumer angst about the cost of oil and gas to condemn the president’s energy programs and economic policies.

Doesn't the GOP know that the president doesn't influence gas prices? Here's another case in point where the GOP tries to use unrelated issues against Obama. It's about supply, demand, and speculation, and the fact that US consumers pay some of the lowest prices for gasoline in the developed countries. Their ignorance knows no bounds.

From ABC News.

Quote:

By SUSANNA KIM (@skimm)
April 12, 2011
While American drivers are spooked by $4-per-gallon gasoline prices in the U.S., they may be shell-shocked on other continents like Europe. In London, gas was $8.17 per gallon in March, and in Istanbul, Turkey the price was $9.63, according to DailyFinance.

Leah McGrath Goodman, author of "The Asylum: The Renegades Who Hijacked the World's Oil Market," said at least two factors contribute to the variance in global gas prices. First, countries that produce their own oil have lower prices. Second, different governments choose to subsidize or tax citizens for purchasing gas.

"Every country is different, obviously," Goodman said. "Some countries have amazing subsidies. In Libya, even with its conflict, its low price has a lot to do with the fact that the government can choose to charge people a lot less."

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@cicerone imposter,

I have often had that thought. Obviously, a president will have influence, but how much? Bush was blamed for high gas prices because, well just because. Oil dropped from somewhere around $140/bbl to $89/bbl. Again, blame Bush. Low oil price for a damaged economy. By the way, the drop in oil prices was predicted by Boone Pickins. I would like to hear what he has to say in 2012.

I guess we can have it both ways, if we try hard enough.

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@roger,

When gas prices reach $5 to $6 a gallon, demand in the US will drop dramatically, because people just can't afford those prices.

People are already feeling it at $4 a gallon.

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@cicerone imposter,

I'm lucky for once. I'm seeing 3.29 at most stations, and 3.09 at Smith's Grocery store if you want to burn 1/2 gallon waiting in line.

Last time it was at $4.00 it influenced driving all right. On a trip to Albuquerque, the tractor trailers were still there, but private vehicle traffic was much lighter. In this town, five out of seven (actual count) vehicles are either SUVs or pickups. Some are genuine working trucks, but most are 4wd pickups being used as passenger cars. At $4.00/per gallon, the mix changed. It must be nice to be able to park the little Honda and drive the 8 cylinder behemoth till you start getting dirty looks from everyone else.

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@roger,

T Boone had an article out yesterday. I made notes but can't find them. I recall him saying that if the 850,000 of 18-wheel tractor trailers could be converted to natural gas...
He seemed to be big on natural gas.

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@realjohnboy,

The problem John, or one of them, with converting 850,000 trailers to natural gas is that the demand for natural gas would increase substantially and that of diesel decrease. This would cause a corresponding change in the respective prices of those commodities.

I suppose those who use natural gas for domestic heating would say that the idea is a load of rubbish. And W.J. Bryan did say, as well he might, that it's a poor head that can't find plausible reasons to follow its heart.

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@spendius,

True enough. We have not just one person on A2K who knows a more the natural gas industry than you or I.
Natural gas wells are being capped because of low demand.
To be continued, no doubt.

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@realjohnboy,

To what extent is the US piped up for NG distribution?

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@spendius,

278,000 miles of natural gas transmission pipeline and 1.9 million miles of distribution pipelines that get the natural gas to the end user.
That seems like a lot but we will have to wake up Farmerman.

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I wonder if Italy was planing to cash in some bonds so they could pay of their debt, but the US claim them to be counterfeit.

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re: Reasoning Logic.

Would you PLEASE stop posting 25 minute videos. I am, at least potentially, interested in your viewpoint, assuming you have one, but I have no intention of wassting 25 minutes on another damned slow as molasses video. If you have a point summarize it, otherwise you're just wasting bandwidth and time.

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@MontereyJack,

MontereyJack wrote:

re: Reasoning Logic.

Would you PLEASE stop posting 25 minute videos. I am, at least potentially, interested in your viewpoint, assuming you have one, but I have no intention of wassting 25 minutes on another damned slow as molasses video. If you have a point summarize it, otherwise you're just wasting bandwidth and time.

I have said this to RL countless times. It will be a cold day in Hell before RL summarises anything.

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Quote:

The number of Americans filing first-time claims for jobless benefits fell to a level matching a four-year low, more evidence the labor market is healing.

Applications for unemployment insurance decreased 2,000 in the week ended Feb. 25 to 351,000, Labor Department figures showed today. Economists forecast 355,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls fell, while those getting extended payments also declined.

Firing is on a downward trend as employers gain confidence in the outlook for economic growth. A smaller number of job reductions also puts those companies in place to hire additional employees as demand picks up.

“Firing is not holding back the labor market,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who forecast 350,000 claims. “Businesses recognize that they don’t need to lay off any more people. Down the road, they’re going to realize they need to hire more people.”

A separate report today from the Commerce Department showed consumer spending rose less than forecast in January after little change the previous month.

Incomes Increase

Purchases climbed 0.2 percent, while incomes increased 0.3 percent. The median estimate of economists surveyed by Bloomberg News called for a 0.4 percent increase in spending and a 0.5 percent rise in incomes.
Stock-index futures held gains and Treasury yields rose after the figures. The contract on the Standard & Poor’s 500 Index expiring this month climbed 0.3 percent to 1,368.0 at 8:56 a.m. in New York. The yield on the 10-year Treasury note climbed to 2.05 percent from 1.97 percent late yesterday.

I know there are all kinds of qualifiers and caveats and not all the news is good, but a little good news is better than completely bad news. Gas prices probably are keeping people from spending which does not help the economy. On the other hand, my husband got a raise for the first time in three years the other day and according to the above article, he is not the only one to have gotten a raise.

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@revelette,

Two issues that needs to be clarified; 1. higher gas prices are determined by speculators who never take possession of the product, but make money without producing anything (look at the ratio between what goes to the producers and refiners, and what the speculators are getting), and 2. Chrysler sold more product last month than any time during the Great Recession. Look at the GOP candidates that were against the auto industry bailouts.

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@izzythepush,

Germany is getting ready to help Greece and Spain with their financial difficulties. lol

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@revelette,

Some good news is indeed better than all bad.

High gas prices are inclined to hurt the economy, I'm sure. That might make them a leading indicator. Gas prices might also be an indication of a devalued dollar. I keep a rough watch on the relationship between gas and diesel. On the rare occasions when diesel is actually the lower, the economy is usually pretty bad.

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@roger,

High gas prices will certainly hurt some portion of our population; those earning minimum wage, the retired on fixed-limited incomes, and those who must travel in their cars to work for long distances.

However, we must remember several truisms; a) the US consumer pays one of the lowest gas prices in the world, b) auto sales have been improving, c) jobs are being created, and d) the US economy is doing pretty well compared to the rest of the developed countries.

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@cicerone imposter,

Quote:

High gas prices will certainly hurt some portion of our population; those earning minimum wage, the retired on fixed-limited incomes, and those who must travel in their cars to work for long distances.

It is already majorly impacting the hospitality industry, money spent to fill up the tank is money that is no longer available to go out to eat with. In our area median and disposable incomes have both been going down for three years, with no relief in sight.

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Where is the US economy headed?

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