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PRICE at which gas will finally cause panic and chaos

Discussions about the economic and financial ramifications of PEAK OIL

Re: PRICE at which gas will finally cause panic and chaos

Unread postby Ludi » Thu 19 Jun 2008, 22:09:15

$this->bbcode_second_pass_quote('eastbay', '
')Based on my recent experience, I strongly suspect it's going to take much more than US$ 6.00/g to get people to significantly move away from personal ICE transport.


I agree, because they are so dependent or believe themselves to be so completely dependent on it. To move away from personal autos would mean a complete upheaval of their lives for most people.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Revi » Thu 19 Jun 2008, 22:15:15

When faced with the choice between gas and food, it seems like most people pick the gas. There was a bit on the news about a guy who was getting food at the food bank because he had to spend his paycheck on gas.

At least there was a food bank to get it from.

It's getting wierd out there.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby thuja » Thu 19 Jun 2008, 22:30:10

My guess is that 5-6$/gallon will cause truckers to strike. That combined with high food prices and other escalating costs will lead to food and fuel shortages such as we are seeing in Europe.

Depends what you mean by pani anc chaos though. If you mean, massive social unrest, civil breakdown in most populated centers, etc...I'd say 10$/gallon plus associated high food costs would do that.

At that point there just won't be enough to go around...
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby TreebeardsUncle » Fri 20 Jun 2008, 02:26:04

Ok.
Gas is running close to $5/gallon in much of California now and it has not had much of an impact. $6/gallon won't either. Folks are still expecting airports to expand. Keep an eye on the recreational boaters though. Almost none of that traffic is a function of anything needed.

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Re: PRICE at which gas will finally cause panic and chaos

Unread postby SolarDave » Fri 20 Jun 2008, 02:59:24

$this->bbcode_second_pass_quote('TreebeardsUncle', 'O')k.
Gas is running close to $5/gallon in much of California now and it has not had much of an impact. $6/gallon won't either. Folks are still expecting airports to expand. Keep an eye on the recreational boaters though. Almost none of that traffic is a function of anything needed.

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I was at Lake Shasta three weeks ago. It was a ghost town.

It is a very popular lake for renting houseboats. Was.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby MrBill » Fri 20 Jun 2008, 03:54:33

$this->bbcode_second_pass_quote('ROCKMAN', '
')Off the topic a little but - I have seen an interesting story regarding Mass. or Mich. : mandatory health care coverage provided by the individual and if one fails to acquire coverage (unless fitting one of the exemptions) they a fined. As much as this goes against my basic libertarian nature there are times when it's best for society that the gov't apply "force". Another example would be the requirement of flood ins. for those building in the flood plain.


Not at all Rockman! One definition of a Libertarian is Fiscal Conservative and a Social Liberal. Being properly insured versus expecting someone else to pay for you or your mishaps is fiscally conservative. Self-insure when and where it makes sense. But if a small probability event with a large negative economic impact would bankrupt oneself then it makes sense to insure externally against such an event.

A Libertarian might therefore say, everyone must buy insurance, but we will leave it up to the private sector to provide that insurance. Then government's role is not being Big Brother, but making sure everyone is properly insured AND policing the private insurance companies to make sure they are providing that proper insurance without fraud or deception.

FEMA providing insurance to those that build on flood plains is Big Brother creating the moral hazards to building on flood plains in the first place. It is fiscally irresponsible to all those taxpayers that did not build on flood plains AND it rescues homeowners from the consequences of their own poor decisions. It may be a Libertarian's right to build there, but they would not expect government assistance to bail them out. Nor should they.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby eastbay » Fri 20 Jun 2008, 04:30:42

$this->bbcode_second_pass_quote('thuja', 'M')y guess is that 5-6$/gallon will cause truckers to strike. That combined with high food prices and other escalating costs will lead to food and fuel shortages such as we are seeing in Europe.

Depends what you mean by pani anc chaos though. If you mean, massive social unrest, civil breakdown in most populated centers, etc...I'd say 10$/gallon plus associated high food costs would do that.

At that point there just won't be enough to go around...



Truckers in the USA are very unorganized and will not be able to conduct an effective strike any time soon. They are (lol) 'independent-minded' and think they are not in need of a representative organization.

$10.00 gas won't be enough to create social unrest. It hasn't in Turkey or many other countries, and won't in N. America either. What will, however, create unrest is unavailability of fuel at any price. That's not going to be a serious concern to the wealthier import-land nations until we clearly say goodbye to the undulating crest and pass the peak. Tough to pick the date for this ... at least now it's tough. It'll get easier to see the time of the ungluing of society as the epic event of the decline in worldwide oil production nears. It's still a ways off.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Heineken » Fri 20 Jun 2008, 07:51:22

$this->bbcode_second_pass_quote('MrBill', 'H')eineken wrote:
$this->bbcode_second_pass_quote('', 'H')uh, Mr. Bill? The idea behind universal health care is that everyone gets care---at least some basic care. So then it doesn't matter if you're Tiger Woods or not. You can get your broken leg set without second-mortgaging the house.


Yes, being from Canada and having worked in the UK I know what universal healthcare is AND what it is not. The NHS is a sick joke or is that a joke that makes you sick?

The issue is not getting care, but how long the queue is, and how long you have to wait? If you are relatively young and healthy there may be a lot of sick people ahead of you in line. Hence the idea of buying supplemental insurance to cover elective surgery or private care.

I am talking about mandatory health insurance for everyone whether in a private or default public plan that guarantees basic medical care. Similiar to Germany.

This is quite different than blanket coverage regardless of the costs. Not an insurance scheme, but a wealth transfer. Let's call it by its true name. And it is different than allowing some to opt out at the risk of not being elligible for coverage at a later date.

The crime of the US system (yes, I lived and worked there, too) is that a worker can pay into a plan their entire working life, and then find themselves uninsured should they lose their job and have a pre-existing medical problem that prevents them from getting a new job or finding new coverage at an affordable rate. That is a very serious short-coming that needs to be fixed!

$this->bbcode_second_pass_quote('', 'W')ait until you lose your coverage and have nothing. Then comment.


That will never happen for the simple reason that I joined the plan when I was young and healthy, and now I continue to pay the same premiums as I did back then. Because unlike US plans tied to an employer my private coverage is portable so I take it with me. Plus if I do something risky like off-piste skiing I take additional rescue insurance just in case. It is called looking ahead and being aware of the risks. I can recommend it.

Look I am sorry if your health is failing and you cannot get the treatment you need. That is a failure of the US healthcare system. Surely between 300 million Americans they can design a better one? If they took their ideological blinders off they could pick and choose from a smorgosbord of public and private plans that exist elsewhere in the world and deliver higher levels of care for less money. But then again the USA seems unable to come to terms with many of its problems. So back to square one. Play the blame game.


I have no health care and no prospect of any. So , from the standpoint of self-preservation, my support of universal health care is eminently rational. Even if it means long waits in line. A long wait in line is far preferable to NO CARE. What other position on this would you expect me to hold, Bill?

Under the present so-called system, there are ALREADY some very long waits. There is ALREADY a ton of rationing. There is ALREADY enormous waste and graft. And, public monies are ALREADY being used---for Medicare, Medicaid, and the universal care system for the military.

Some Canadians on this site, like Threadbear, have had good things to say about their system.

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Re: PRICE at which gas will finally cause panic and chaos

Unread postby MrBill » Fri 20 Jun 2008, 08:27:47

Well, nothing against Threadbear personally, but she is an example of someone drawing benefits from a system that she has not fully paid into. The problem of open systems where benefits are paid out regardless of how much is paid in. It is simply unsustainable over time. I do not expect you to have a different view based on your own personal situation. I truly wish this was not an issue for either of us. However, good public policy cannot be based on immediate need with no calculation of its long-term cost. Unfortunately, the reverse is true. We make it true because we wish it were true. And when we wish upon a star...
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby ROCKMAN » Fri 20 Jun 2008, 08:30:32

eastbay et al,

One aspect of the trucker's anger I have difficulty understanding. I can see their frustration if they are hauling on a contract that doesn't allow adjustments in their rates to offset increased fuel costs. But if they are free to raise their rates to compensate for increasing fuel pricest then the extra costs are passed along to the consumer...as well it should.

Perhaps a big stumbling block is the inability of independent truckers to raise their rates because the big trucking firms have locked in lower fuel costs through the futures market. For five years Southwest Aitrlines had a tremendous advantage over the other airlines. Some clever and gutsy fellow there made a big bet of jet fuel futures. Had JF gone down in price it would have cut them deep. But it didn't and the rest is history.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby wisconsin_cur » Fri 20 Jun 2008, 08:38:52

$this->bbcode_second_pass_quote('ROCKMAN', 'e')astbay et al,

One aspect of the trucker's anger I have difficulty understanding. I can see their frustration if they are hauling on a contract that doesn't allow adjustments in their rates to offset increased fuel costs. But if they are free to raise their rates to compensate for increasing fuel pricest then the extra costs are passed along to the consumer...as well it should.

Perhaps a big stumbling block is the inability of independent truckers to raise their rates because the big trucking firms have locked in lower fuel costs through the futures market. For five years Southwest Aitrlines had a tremendous advantage over the other airlines. Some clever and gutsy fellow there made a big bet of jet fuel futures. Had JF gone down in price it would have cut them deep. But it didn't and the rest is history.


I think part of the problem might be too much supply in trucks and drivers. So a shipper can say "if you won't do it for this price than I will find someone who will."

I also can't help but think that in some cases there is some exaggeration going on. Margins are being cut and perhaps when one accounts for food and the truck payment the driver is not making anything... he is just making enough to feed himself and keep the truck or there may even be a loss at the end of the month, after he has paid for the truck and paid the broker, sent off his alimony etc etc...

So between the two you have truckers suffering from a slow bleed, still ready to take business away from one another (keeping prices too low) in order to try to keep the cash flowing and chase that fulcrum dollar that will tip them into profitability, but never really catching it and loosing money every month.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby MrBill » Fri 20 Jun 2008, 08:45:45

We should ask Drew or someone more familiar, but in general we are talking about fixed and variable costs.

In the long-run fixed costs have to be covered including paying for depreciation on the truck, saving to buy a new one and a return on the cost of capital.

In the short-run the independent is more concerned about covering the cost of their fuel and keeping the rig running in order to make bank payments.

Similiar to GM or Ford churning-out vehicles at a loss. They are covering their variable costs, but not their fixed costs of plant and long-term cost of capital.

It is an accounting loss versus a cash flow one in the short-term.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Cashmere » Fri 20 Jun 2008, 09:34:37

The wiki article on Canadian health care is revealing.

2.2 doctors per 1,000 people. Average in 1st world is 3.

Several great stories about famous Canadians who came to the U.S. and paid out of pocket because they couldn't get the care in Canada, including a liberal politician who was ardently against a two-tier system. Until she needed breast surgery, then all of her liberal ideology went out the window and she used her wealth to go to another country to get her surgery.

Classic example.

Average wait time for MRI is off the charts.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby thuja » Fri 20 Jun 2008, 17:53:10

$this->bbcode_second_pass_quote('eastbay', '
')

Truckers in the USA are very unorganized and will not be able to conduct an effective strike any time soon. They are (lol) 'independent-minded' and think they are not in need of a representative organization.


You may be right but it really doesn't take much to do a trucker strike. About twenty trucks on major arterials slowing down and blocking all lanes. Voila...chaos...

This is what we are seeing in Spain, Scotland, other parts of Europe. This had led to food and fuel prices skyrocketing, shortages and hoarding.

Because of the massive distances, poor fuel economy and lower wages here I think the tipping point here is somewhere near 6$/hr. I'm not saying blood in the streets...I'm saying Europe style trucker protests.


$this->bbcode_second_pass_quote('eastbay', '
')$10.00 gas won't be enough to create social unrest. It hasn't in Turkey or many other countries, and won't in N. America either. What will, however, create unrest is unavailability of fuel at any price. That's not going to be a serious concern to the wealthier import-land nations until we clearly say goodbye to the undulating crest and pass the peak. Tough to pick the date for this ... at least now it's tough. It'll get easier to see the time of the ungluing of society as the epic event of the decline in worldwide oil production nears. It's still a ways off.


Well just have to disagree- 10 $ gas combined with food prices/merchandise prices and we're looking at serious unrest. But I have to agree that we may see actual fuel shortages before that. That, as well, would cause pandemonium. Time period? 3-5 years...
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby cube » Fri 20 Jun 2008, 18:39:46

$this->bbcode_second_pass_quote('thuja', '')$this->bbcode_second_pass_quote('eastbay', '
')

Truckers in the USA are very unorganized and will not be able to conduct an effective strike any time soon. They are (lol) 'independent-minded' and think they are not in need of a representative organization.


You may be right but it really doesn't take much to do a trucker strike. About twenty trucks on major arterials slowing down and blocking all lanes. Voila...chaos...
...
That would never work in America....even if crude oil hit $300.

Americans tend to have very little tolerance for demonstrations which cause any type of public inconvenience. For example if the employees at a public transit agency were to go on strike causing havoc to people's commute schedules society would more likely vent their anger at the strikers and NOT management. That's why you rarely see crap like that happening in the USA as opposed to say France. At least that's what it says in the travel guide section for what to expect in France. :)

What happened in Spain where the police just stood by and did nothing but wait for the politicians would never happen in the USA. If a truck driver were to do something stupid like block the freeway, the police would show up in less than 5 minutes and arrest the truck driver on the spot if he doesn't get moving. The police and the politicians would have the full support of the American public.
Besides traffic citations for commercial vehicles can be very expensive.
Correct me if I'm wrong but truckers tend to be deathly afraid of getting slapped with a fine from the police.
(any American truck drivers here who?)
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby thuja » Fri 20 Jun 2008, 19:22:40

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('thuja', '')$this->bbcode_second_pass_quote('eastbay', '
')

Truckers in the USA are very unorganized and will not be able to conduct an effective strike any time soon. They are (lol) 'independent-minded' and think they are not in need of a representative organization.


You may be right but it really doesn't take much to do a trucker strike. About twenty trucks on major arterials slowing down and blocking all lanes. Voila...chaos...
...
That would never work in America....even if crude oil hit $300.

Americans tend to have very little tolerance for demonstrations which cause any type of public inconvenience. For example if the employees at a public transit agency were to go on strike causing havoc to people's commute schedules society would more likely vent their anger at the strikers and NOT management. That's why you rarely see crap like that happening in the USA as opposed to say France. At least that's what it says in the travel guide section for what to expect in France. :)

What happened in Spain where the police just stood by and did nothing but wait for the politicians would never happen in the USA. If a truck driver were to do something stupid like block the freeway, the police would show up in less than 5 minutes and arrest the truck driver on the spot if he doesn't get moving. The police and the politicians would have the full support of the American public.
Besides traffic citations for commercial vehicles can be very expensive.
Correct me if I'm wrong but truckers tend to be deathly afraid of getting slapped with a fine from the police.
(any American truck drivers here who?)


I'm not saying they wuld be effective- or be appreciated by the American public. I'm just saying it doesn't take much- a few disgruntled out of work truckers with an axe to grind. I remember way back in my hippie protesty days when I was a young lad a group of us marched onto the Freeway to protest US involvement with the Guatemalan government- shut it down for about 3-4 hours if I remember correctly. And that was about 20-30 grumpy hippies. Do you really think this couldn't happen in the States?

I'd say its more possible...
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Ludi » Fri 20 Jun 2008, 19:33:57

What would a trucker strike accomplish except screwing things up more?
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby wisconsin_cur » Fri 20 Jun 2008, 19:43:30

$this->bbcode_second_pass_quote('Ludi', 'W')hat would a trucker strike accomplish except screwing things up more?


Vent anger and frustration... those with anger and frustration do not care how bad it hurts someone else (or even themselves). It is the infliction of pain that helps them meet their needs to vent anger and frustration.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby thuja » Fri 20 Jun 2008, 19:57:34

$this->bbcode_second_pass_quote('wisconsin_cur', '')$this->bbcode_second_pass_quote('Ludi', 'W')hat would a trucker strike accomplish except screwing things up more?


Vent anger and frustration... those with anger and frustration do not care how bad it hurts someone else (or even themselves). It is the infliction of pain that helps them meet their needs to vent anger and frustration.


Agreed...who said anything about accomplishing anything?

But my guess is that truckers would ask for subsidization by the Gubmint for fuel. And they might deserve it. If we want food, fuel and goods transported, we better insure that truckers earn enough to accomplish that. This ain't the airlines...this is basic life support.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby threadbear » Fri 20 Jun 2008, 20:15:51

$this->bbcode_second_pass_quote('MrBill', 'W')ell, nothing against Threadbear personally, but she is an example of someone drawing benefits from a system that she has not fully paid into. .


News to me. You think that since I'm a democratic socialist, I'm poor? I probably paid more in taxes than you did last year. I'm relieved I have the opportunity to do that, provided Canadian tax base doesn't start to fund an expansion of our military, in any way similar to the U.S.

Canada's medical system, though in great need of improvement, is head and shoulders better than the American. So bloody what if you have to wait a year to get a knee replacement? It's better than the American alternative, of no insurance at all.

Heineken, Have you considered going to a place like India or Mexico, for surgery, if that problem ever arises?
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