Saturday, April 5, 2008
Inflation is starting to take it's toll. Three airlines have now gone out of business in quick succession. ATA, aloha and now Skybus have filed for bankruptcy recently. One of the major causes in all three failures, high fuel prices. Who knew? Now we are seeing that many of the truckers around the country are contemplating striking in protest of high diesel costs. We've already seen the writers guild strike. Americans are having trouble paying the escalating costs of living. Does anyone realistically think this will be the end of this or is it more likely only the beginning? Since the Fed has shown no inclination to halt the cause of inflation, namely massive monetary expansion, then I'm guessing we're just entering the second inning. I fully expect congress to go down the price control avenue again. First it will be on oil pricing. I expect to hear rhetoric by this summer from politicians about how the evil oil companies are driving up the price of energy. In fact I'm already starting to hear this on some of the business channels. (funny how the media nevers talks about the evil government taxes on gasoline driving up prices.) Amazing since the XOM, CVX and COP of the world are only tiny players in the energy markets compared to the state owned companies. I wonder how the politicians plan on regulating Saudi Aramco. I fully expect legislation to prevent truckers from striking will come forward soon. For any of you who lived through the 70's does this sound familiar? While I expect the market has put in a bottom for a while probably at least till the elections, the Fed is laying the foundation for much more serious problems. Problems that can't be cured by flooding the world with money. In fact, problems that are caused by flooding the world with money. But hey when have politicians ever worried about the future?