Submitted by Tyler Durden on 02/28/2012 21:37 -0500
Crude
Crude Oil
Iran
Purchasing Power
TrimTabs
Although U.S. demand for crude oil has fallen by 1.5 million barrels per day since 2007, anyone spending more than a few minutes on the road, watching TV, or surfing the internet will be more than unpleasantly aware of the rapid rise in gas prices recently. As we noted earlier, following January's record high average gas price, February just surpassed its own record and TrimTabs quantifies the impact of this implicit tax on consumption, noting three key factors that will remain supportive of high oil prices: Central Bank liquidity provision (ZIRP), political tensions, and implicit USD devaluation. Critically, around 70% of the benefits of the payroll tax extension has already been removed thanks to 60-80c rise in gas prices nationwide whose growth has far outstripped wage and salary growth in recent years. As Madeline Schnapp points out, while the latest round of oil speculation is likely to end with a pop, she doubts oil prices will drop much below $100/bbl as the erosion of purchasing power from high energy prices is here to stay.
more,,,,,,,,,,,,,,,,,
http://www.zerohedge.com/news/another-unintended-consequence-80-billion-gas-price-tax-consumption?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Real-time income tax withholdings suggest real wage and salary growth was barely positive in January and February. If fuel prices hold steady or rise further, we expect real wage and salary growth to turn negative.
Bottom Line: Rapidly Rising Fuel Prices Put Sluggish Economic Growth at Risk.
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
| 