STICKER SHOCK: Is Everything Really All That Hunky Dory in Lala Land?

Have you by any chance noticed that the price of gas has risen over the last three or four years? If you haven’t, I’d really like to know what brand of scotch you have been drinking. Speaking of which, have you noticed that the price of scotch has risen over the last three or four years? Maybe you noticed that, at the same time commodities have been subtly increasing in costs at the register, housing values have peaked and begun to nosedive? Well, to cap this opening paragraph off, how many people out there honestly feel that property taxes are going down as housing values have been decreasing? No show of hands?

With unemployment figures on the upswing, housing values heading for the basement, property taxes staying the same or going up, and the price of everyday goods such as groceries, clothing and condoms skyrocketing, how long will it take for the consumer to yell and scream bloody murder?

There IS money to be made in this market. If you go and buy gas at $3.50 a gallon, instead of selling it at $3.65 a gallon you stick 50,000 gallons into your underground tanks and sit on it for 30 days, you will be able to sell it for $4.15 a gallon. Or, if you buy 100 tons of rice at $100 a ton and sit on it for 30 days, you may be able to sell it as high as $200 a ton.

This is called a “run up market,” otherwise known as inflation.

Here’s what feeds that mentality. With prices going up and with the retailer who sells gas for a living purchasing gas at $3.50 a gallon and selling 10,000 gallons at $3.65, there is a $1,500 gross profit. But, at the same time, he will need to replenish the 10,000 gallons at a cost of $3.75 a gallon, and he has just LOST $1,000 from a cash position. So, the logical answer is to buy quantity and keep the cost per unit down, sit on it until the resale value goes way up, then sell. That’s called, “maximizing your yield in an inflationary market.” And, of course, that inevitably feeds inflation like a roaring fire and may cause spot shortages.

Just apply that philosophy across the board on every product you can think off that doesn’t have a prescribed shelf life. My friend, we could be in for a very tough ride that I don’t know we’re prepared for.

Here’s more.

The increase in the minimum wage has stoked the furnace. Mind you, I’m not saying that the increase should not have happened. It needed to happen. Inflation, although slowed over a number of years, was still eating away at the value of the dollar while those most impacted were minimum wage earners. Considering the escalating price of gas at the pump, I think a lot of those minimum wage earners would have been priced out of transportation to their minimum wage jobs. But, the fact still is that someone has to pay for that increase in the minimum wage, and it you know darned well who it’s going to be: you and me.

Energy prices for heating and air conditioning are on the very verge of skyrocketing. Prices at the pump, slated to be over $4.00 a gallon “sometime this summer,” have already passed the $4.00 mark in much of California, while energy czars everywhere are smiling at unparalleled increases on bottom-line profits. Shell is making $80 million plus, per day. Executives of the five biggest oil companies, Exxon - Mobil, Royal Dutch Shell, BP, Conoco - Philips and Chevron, were called to testify at a congressional hearing where lawmakers raked them over the coals for making enormous profits while investing next to nothing in the development of alternative sources of energy. They received over $18 billion in tax breaks last year while their 2007 profits hit $123 billion as they passed the blame to OPEC (and the rising cost of crude.) Horse shit! (Pardon my French). Congress, in what appears to me to be a dog and pony show, didn’t do a damned thing after hearing the testimony.

Nationally, gaming revenues are down over 5%; that fact alone is an ominous indicator of a slide in the disposable income of Americans. Layoffs have been going on for weeks, 80,000 here, 40,000 there, ad infinitum. The tax burden on Americans is already backbreaking, and yet two Presidential candidates appear ready and willing to add to it by nationalizing health care. The plain fact is that Congress has drastically screwed up the Social Security system and turned Medicare into a national nightmare; these two factors are perilously close to adding to the national per person monetary burden of all of us.

My fellow Americans, this is really going to be a long and hot summer. We’re probably looking at massive stagflation again, coupled with high unemployment and only God knows what else. We’re just now beginning to get lip service on the subject, let alone solutions. Those in the positions of being able to do something about it are either too busy running for reelection or appearing on news talk shows.

I’ll be very surprised if this magnanimous tax rebate now being rushed to the mail does anything at all for the economy. With what we are facing, most Americans will either pay down debt or save it for a rainy day.

But, November is just around the corner, and we do have the ability to vote them all out. A change of guard is most certainly long overdue. Isn’t it time to stick the sticker shock where the sun doesn’t shine?

That’s MY AMERICAN OPINION, respectfully submitted.