This week's Barrons discusses falling U.S. oil consumption and the rocky road the refiners such as Valero, Tesoro, Frontier and others face going forward. More efficient cars on the road, an aging population that drives less and a slowing economy have all forced consumption down and thinned refining margins.
The chart included in the article is quite interesting. Note that for all the pain and complaining last year when prices hit a record $4 per gallon, gasoline expenditures as percent of disposable income was lower in 2008 than it was in the 1980. And in 2009 it is only half of what it was in 1980.
The chart included in the article is quite interesting. Note that for all the pain and complaining last year when prices hit a record $4 per gallon, gasoline expenditures as percent of disposable income was lower in 2008 than it was in the 1980. And in 2009 it is only half of what it was in 1980.
Barrons usually does a good job of putting numbers into perspective. Inflation is an insidious villain destroying savings and a way for governments to impose a stealth tax. Inflation also turns the dollar into a rubber yardstick - next to useless when comparing prices over time. So using inflation adjusted dollars, or in this case, expenditures as a percentage of disposable income gives a better perspective. Compare this article to how politicians and others with an agenda use unadjusted prices to whip up the public on various issues.
The full article can be found HERE [$].
Anyway, the memory of us old timers that things were harder back then is correct! We truly did have to "walk 10 miles to school, barefoot, in the snow, uphill both ways".
Anyway, the memory of us old timers that things were harder back then is correct! We truly did have to "walk 10 miles to school, barefoot, in the snow, uphill both ways".
