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........" why are petroleum prices so high?..."
I guess we could bore everyone to death with the complicated economics of it. We could also refer you to sites that have tracked parity between grams of gold/barrel of oil.
Common sense and one's own spending habits reveal that the price of anything we have ever bought depends on how much we want it, how badly we need it, or what is is REALLY worth to us.
If one has ever FAILED to purchase something because it was "too expensive" then it really wasn't worth the price. The converse is true.
Folks were convinced they'd sell homes at huge short term profits and borrowed accordingly. They risked all and got hit. Others used 0% credit card offers, overspent (since it was not REAL money) missed a payment and saw interest rates zoom to 34%, as agreed in the fine print.
Gasoline? Diesel fuel? The price will rise until people STOP buying it. At 5,6,7 per gallon it will still be "worth" it.
"Gasoline? Diesel fuel? The price will rise until people STOP buying it. At 5,6,7 per gallon it will still be "worth" it."
Exactly right. And it'll still be worth it at 14, 15, 16 dollars per gallon. For as long as there are lunkheads who can't get out of their cars, or start their day without a six-dollar cup of latte, or stop caving in to their brats' demands for every cheap, lead-laced toy from China, there will be expensive gasoline to fill their demand.
$4 a gallon for gas? That's highway robbery. We should be paying at LEAST $9 a gallon by now. Considering the cost of a 16-ounce mocha latte, $4 a gallon for gas is a steal.
I agree with you on that one, snt, and with the down turn of the economy those are exactly the choices that are being made by U.S. consumers.
Alas, though, when people start making more rational purchasing decisions, the Wall Street tycoons become worried by the lowered spending and start yelling to the Fed to increase the money supply (thereby lowering interest rates and increasing spending again).
Thus, Paulson (Secretary of the Treasury, and ex-Wall Street CEO) and the Fed pump a new $200 billion into circulation, which pleases Wall Street greatly (especially the $30 billion that is now lining the pockets of the J.P. Morgan folks) but trashes the idea of a more rational rate of consumer spending.
Wonder why the dollar is slipping relative to the Euro and other currencies?
And I agree with you - government should get OUT of the market and allow it to do what it's going to do. The Federal Reserve should be eliminated. It does nothing but cause problems and/or exacerbate existing ones. I don't care WHO is in the White House - Rep. or Dems., government needs to get their hands OFF the market.
I disagree with you re: Wall Street tycoons. I'm sure very few people who work on Wall Street would welcome MORE government meddling in the economy. When more money is pumped into the economy, the economy slows, and the stock market heads south. What's more, it takes longer for a recovery from a recession.
The problem is that everyone is looking for a quick fix to the economy, and it doesn't work that way. Everyone is just going to have to take their licks and ride out a recession and come out on the other end. Attempting to "stop" a recession - or "fix" it, will only make it longer and more deeply-seated.