It shows the intersection of California highways 236 and 9 in Boulder Creek, and was taken on November 19th, 2000. Even last week, the 2000 price of gas looked quaintly low.This picture was taken a couple of hours ago, from about the same spot:
The gas station has changed companies, and the price board isn't quite so bold about its contents, but if you look closer...
... you'll see that the price per gallon of regular is now three cents less than it was eight years ago.While that's nice in an obvious way, it's also unsettling. I may just be Joe the Astronomer, not Tito the Economist, but even I can figure out that when the price of such a crucial commodity as gasoline goes through precipitous swings -- in either direction -- it's probably an indicator of a sick economy.
On the bright side, though, I filled the Jeep's tank for less than 30 bucks, and the guy across the street by Johnnie's Market was having a great time with his dog.
Update, December 6, nine days later: the price is down to $1.769. That's a decline of more than two cents a day. At this rate, clearly not sustainable, we'll be down to the magic price of 45 cents a gallon in two months. (That's a "magic price" because, at that point, gas itself is essentially free, since 45 cents per gallon here is for various taxes, so the price per gallon cannot go below that.) This isn't a price fall, it's a collapse. Weird.
5 comments:
The swing in gas prices is surely indicative of a variety of things. Obviously, the economy should be on that list. But there are other things to keep in mind as well.
Industry analysts were saying that oil was really only worth $80 to $100 a barrel when it was selling at $140 a barrel. A big part of that difference was the direct result of skittish investors/traders bidding up the price of oil while fearing the affects of war in the Middle East.
Mr. Bush's initiatives to open up more areas to domestic drilling forced the industry to re-evaluate actual oil reserve levels. All we had to do was threaten to pump more domestic oil and the oil bubble popped!
Pricing indicators work on consumers. Gas got expensive so people found ways to drive less. Reducing consumption/demand results in lower prices.
I just hope it doesn't sink any lower as most of the replacement technologies [GM yeast converting biomass to petroleum, algae based bio-butanol or diesel, etc.] developed over the last couple of years are profitable with petroleum at $40 to $50 a barrel. What better jobs program could we have than to build chemical plants in every mid-sized and larger city to produce energy for domestic production?
i confess to being TOTALLY CYNICAL about gasoline pricing. usually, it's always UP before and during a holiday (so the oil companies can get rich while the fambly drives their van to visit grandma), then it falls back the day after the holiday to "normal."
and when gasoline went up in price this past year, the price of everything else virtually doubled.
but now that gas prices have fallen, do you see ANY SIGN of grocery prices or movie popcorn (now 5 BUCKS* for a minibag here in the city of satan) following suit??? nope. my guess is, we'll be stuck with high prices until the merchants either go out of business for lack of customers or they're sure they've gotten every last cent.
bah, humbug!!
*granted, this is in the U.S. peso, which is worth about half of that, maybe less....but they could buy all the unpopped corn they need for several days at Costco for about that.
m.e.,
I heard a story on NPR that suggested that commodity prices won't go down quickly precisely because they are so hard to increase without losing customers. With high priced fuel, manufacturers had an excuse to raise prices that customers could understand.
IMO, the longer fuel prices stay below $2, the more likely we are to see a very slow pull back in food prices.
--
Regards,
Dann
Dann: the nice thing about being older than dirt is that i can remember when milk prices doubled in the Johnson administration. A half-gallon of milk cost about 38 cents when my first two kids were born ('62 and '63). When #3 came on the scene in '65, a half gallon of milk cost about 69 cents, proving once and for all that you really can't have guns and butter.
prices almost never seem to come down, once they go up, on anything except gasoline. and even that never really goes back to what it used to be...like when my dad could buy 5 gallons of regular for $1. all the stations my dad patronized, btw, were full service, and some of them gave away glassware and dishes.
Not to mention trading stamps, Mary Ellen. My folks collected S&H Green Stamps assiduously, and I can still remember the odd variety of stuff available at the S&H store in Syracuse where Mom would redeem her books of stamps.
Blue Chip Stamp people were similar, I'm sure, but of a different social class... sniff!
... or did your folks collect Blue Chips? In which case, ignore the previous paragraph.
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