Yesterday I talked about the price of gas, discretionary spending, the economy, and housing prices. The Sun must be reading here because today, they have a story about the gas prices, inflation, and real estate.
Inflation is here, no matter how well hidden. Fuel prices are going to bring this all down, forget about jobs, interest rates, etc. Everything costs more when fuel costs more. Everything.
Think about those who bought in the valley after carefully budgeting, and realizing that there is now $100/month extra (or more) in commuting costs. Oops. Food is up too. So is home heat (but that won't be fully realized until next winter). What does $200/month more do to that budget? Lots of macaroni, I'd wager. Those that stretched to buy may find it impossible to keep up.
Are fuel prices perhaps going to be our "external factor" to change psychology? When inflation is finally admitted, interest rates will go up, employment will go down. The housing market will cool, and reverse.
Read the article (between the folksy lines), and make your own deduction. The summer driving season has not even arrived yet. Will gas be $1.50/L then? Sorry about yer tourism.
$5.85 an imperial gallon is a king's ransom
Pete McMartin, Vancouver Sun
Published: Tuesday, May 15, 2007
The bad news is, I am now spending $1.30 for a litre of gasoline.
The good news is, I am now spending $1.30 for a litre of gasoline.
How to square those two sentences?
I live in Delta, which, for some reason I really don't care to know, has the highest gasoline prices in the Lower Mainland, and therefore, quite possibly, in North America.
For those monarchists who still calculate the weight of their rib roasts in pounds and not kilograms, that $1.30 per litre works out to $5.85 per imperial gallon, a king's ransom. British Columbians' gouging at the pumps now rivals that of the British themselves, whose astronomical gas prices we once took a strange, self-satisfied comfort in, regaling ourselves as we did with breathless stories of the exorbitant amounts of money the Brits would pay to run their Vauxhalls. Tsk tsk, you could hear us say. Seventy-five dollars for a fill-up! How could the poor dears do it? It made us feel good about ourselves as we cruised the Safeway parking lot in our Hummers.
Those days are over, never to return again. The price might fall from today's vertiginous heights, but not so much that we will ever be able to approach a gas station again without a sense of dread.
For suburbanites such as myself, who must commute, this will mean an added economic burden.
For lower-income families, who have been forced into the suburbs by high real estate prices, it may mean the difference between owning a second car, or a home. For a hot economy like Canada's, rising gas prices could mean an inflationary spiral.