Is the US economy is in trouble..

I stated we were heading for a recession about three months ago and I still believe we are...

 

From what I've been hearing, recessions come and go, we've had several in the last 10 or so years.

 

As long as gasoline is high, food prices will be high. I've never seen food this high before.

A gallon of milk...$5.00. A dozen eggs...$2.00. I won't even get started on the produce and meat, sugar and flour.

We eat a lot less eggs now and have started buying powdered milk to cook with. I buy generic whenever I can. We don't live in a big city either!!!

I really think we're in for it....

 

I know, food is constantly going up, there lots I no longer buy, we get by on the smallest amount we can. But I buy a lot of canned and boxed food at the salvage store. A lot cheaper then the grocery store, but I've been noticing the price going up there too.

 

The US economy is doing what the US economy has been doing for decades. Employment rates go up so there is more money to spend. More money gets spent on goods and services. Big Oil has been trying to get us used to $3.00 a gallon gasoline. They've been at it for two years now. I've been paying $3.34 a gallon for so long it will be refreshing to pay only $3.00 a gallon. Now my gasoline budget is crowding my goods and services budget. madre and I don't go out to eat as often. We cut out a weekly trip to Woo Fat's all-you-can-eat China Buffet. So did 300 other people. Woo Fat has to pay his rent, food suppliers and employees and keep up on his Lexus lease. Woo Fat cuts back on the number of employees. That makes unemployment rise. Woo Fat also trims back on the amount of supplies he buys from his food supplier. While he's at it he bumps the buffet from $9.95 to $10.95 so he can keep the cash flow going. 25 more people decide the extra dollar ain't worth it and stop going to Woo Fat's for dinner.

The food supplier is caught between a rock and a hard place unless he supplies Chinese restauraunts exclusively. Then he is caught between a wok and a hard place. His delivery costs have sky-rocketed but his orders are down because all the Woo Fat's in the world have cut back. The supplier cuts three jobs adding to the number Woo Fat laid off.

This morning oil was trading for under $90.00 on fears that the US economy was in recession. Two weeks ago it was over $100 on speculation that we would continue to buy fuel regardless of the cost. Oil will continue to trade lower until it hits a subjective floor. Oil producers will have high inventories as prices spiral down. High inventories fuel cutting back on production..... and the cycle never ends.

Recessions are part of the normal business cycle. The gov't has numerous fiscal and monetary o[tions to reduce the impact somewhat. The Fed cut key interest rates this morning, in theory putting more spendable money into the economy.

 

Big oil is correct. We will buy gas at whatever price it is sold at. Some of us have little choice as there is no mass transit in Alabama. T and I did the numbers years ago (like 18 years ago). We could live in a hovel in Jefferson County somewhere or we could buy a nice house in the county next and pay the gas to drive back and forth. At that time there was no question that the nice house and driving was cheaper. Guess what, it still is. We will save money in the long run. And generally speaking we don't spend much more money on gas than the average person who lives in Jefferson County.

Why? Because they sit in traffic as long as it takes us to drive home on the interstate (and the new one takes a lot of time off the drive). Sitting in stop and start traffic costs as much driving 45 miles.

So I'm saving hundreds every month in house payments and not losing as much as one might think in gas costs.

Like everyone else, when gas is up, we cut back elsewhere. Eventually big oil gets the idea. That is what's happening now. I could have told them this when Katrina hit that what the market would sustain in the short term it couldn't sustain in the long. But they wouldn't listen. I'm just the one who pays for the gas.

 

Times are tough to be sure, but I find it humorous at peoples cries of desperation. Not that human suffering is funny, but what people consider is suffering.
I remember my grandfather telling me about the woes of the great depression.........Wow, now that's desperate! And guess what? People made it through, toughed it out, did what it took.
The sad thing is I'm not sure how many Americans have the kind of "grit", as granddad would say, to make it. I'm not even sure I do.
BTW- this post wasn't a reflection on anyone here- the subject just sparked some fond memories of me and gramps talkin' over coffee!