crude oil is now at the highest inflation-adjusted price since 1869

[unblock]

new york light sweet crude settled at $67.49/bbl.

http://money.cnn.com/markets/commodities/

according to the 2nd graph in the link below, this would appear to be the highest inflation-adjusted price since the beginning of the chart, in 1869.

http://www.wtrg.com/prices.htm

note, of course, that this means that oil prices are now higher in inflation-adjusted terms than at any point during the 1970s. the high oil prices of the '70s are almost universally blamed for the double-digit inflation of the late carter / early reagan years.

sustained high oil prices are a strong predictor of rampant inflation. true, we're not nearly as industrial an economy as we were in the '70s, but oil still has a huge impact.


another interesting economic data point: there's only a 36 bps difference between the 2-year and 30-year treasuries. this is remarkably flat. indeed, there's only a 3 bps difference between the 2-year and the 5-year.

http://money.cnn.com/markets/bondcenter/

parts of the curve will likely invert within a week or two, with longer debt at lower yields than shorter debt. a fully inverted curve is almost always a harbinger of recession

again, today's economy is different (ain't that always the case?) most notably, the chinese have been buying the long bond in huge quantities, perhaps "artificially" inverting the curve.

nevertheless, these are NOT good signs.

[unblock]

1. ok, looks like i lied

according to this table, inflation-adjusted prices were indeed higher in 1980 and 1981.

http://inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp

the wrtg.com guy seems to have done some massaging of the numbers. i'm not sure if that's a sensible thing to do or not.

[Richard Steele]

5. "Adjusting" those numbers is probaly not cool. BUT....

What if we compared todays inflation-adjusted OIL PRICES
to todays inflation-adjusted WAGES?

That's the real problem, you see.
In ADJUSTED dollars, the average American who depends upon
a paycheck is earning LESS than in 1980-81.

CEOs have seen their average salary rise 500%
(AFTER adjusting for inflation!)

But WORKERS are falling behind, earning LESS for doing MORE.

[unblock]

7. excellent point! gotta link to the average decline in median income?

[Richard Steele]

8. No, that seems to be a very DIFFICULT chart to find!

Quite odd, considering that:

Many news stories report that "PROFITS" are up, while WAGES aren't...

Most of the Corporate "profit" increases are created by mass layoffs these days.

This Economy hasn't made enough jobs to even keep up with
Population growth...

The REAL unemployment rate is probably at least 10%...

And the "HOURLY Wage" figures don't even TOUCH the fact
that 3 times as many workers had HEALTH benefits and PENSIONS
back in 1980.

And howzabout the fact that they needed to INVENT
a completely NEW catchphrase
to sell this Bullshit to the public:
"JOBLESS RECOVERY"

What a crock! No jobs = no recovery.

Corporate profits DOUBLING while wages decline is NOT a "recovery" of any sort.

[FormerRepublican]

2. We've been teetering on the brink of recession for the last 5 years.

We haven't had a decent economy since Bush got into office.

But, hey. BushCo says oil prices won't be the worst ever until they hit $90 bbl.

The public is seriously pissed, but BushCo just goes along it's merry way, lost in a dream, and totally uncaring about the concerns of Americans. Bush doesn't believe them polls anyway, and he's surrounded by Bush echoing robots to prove it!

:grr: :grr: :grr:

[unblock]

6. actually, i think we've been in a recession of sorts for some time now

lemme 'splain: ya know how they "exclude volatile food and energy prices" from the core rate of inflation? but of course, that's where the inflation, in fact, is?

what if we did the same thing for gdp? the military and energy businesses are booming, but these of course are quite volatile. the energy business in particular is booming simply BECAUSE of the inflation in oil prices.

so, what if we excluded those industries from the gdp, to get at the "core" gdp? i'd bet we've been in a recession for some time now.

[rman]

3. next year: >$95/barrel

[cliss]

4. When I read threads like this, all I can think of is

Jimmy Carter's voice echoing in my brain. They replayed his forward-looking speech on Air America Radio a few weeks ago. He said,

"...it's of the utmost importance to reduce our dependency on foreign oil..." I can't help thinking that Carter was almost ordained to be there, at just that pivotal time in our history.

Unfortunately, his wise words were not heeded. Detroit went its own damn way and made bigger, more gas-guzzling cars than ever before. Our society is structured around cars.
----------------------------

I think the next few weeks are going to be incredibly interesting. The pressure is going to be on Bush to do something. Naturally, he won't. He'll just hide out. People will be furious, at the breaking point because I expect gas prices will go up even more, maybe around $3.50 or $4.00 per gallon.

Just watch the fireworks then.