How do they do it? The Los Angeles Times wanted to know how commuters coped with such high gasoline price.
We wondered the same thing. Yesterday, we had to take a long drive for an important meeting. We drove for three and a half hours through a beautiful part of France, between Limoges and Le Mans, roughly. The fields were lush and green. Sunflowers were in bloom. Combines were harvesting what we took to be wheat, but we weren’t sure.
Making the drive more interesting, there was a huge antique car rally going on in Le Mans. We passed old Jaguars, Triumphs, MGs...all the brands the British sold to foreigners. There were also many cars we couldn’t identify.
When we stopped for gas, a mint condition Austin Healey 3000 drove up next to us. We saw the driver had English license plates.
“Hey, we haven’t seen one of those in years,” we began a conversation.
“Well, they’re still around...but they’re not as cheap as they used to be.”
Nothing is as cheap as it used to be. Coming and going on our journey, we had to fill the gas tank twice, which cost a total of 186 euros – or about $260. We can afford it – barely. But what about people who only earn minimum wage? Or even an average income?
Well, the LA Times tells us that they are spending less on food, movies and clothes.
The Wall Street Journal addresses the subject more broadly. They are “trading down...” it says. What else can they do? They’re getting rid of the gas-guzzlers...and the big houses. They’re cutting back.
“Gas use at 5-year low,” further reports the WSJ.
Oil added $5 yesterday – to $141. And gold jumped $13.
Has oil topped out? It didn’t seem so yesterday. Inflation hasn’t gone away. Japan reports price increases at the wholesale level at a 27-year high.
Bill Bonner
The Daily Reckoning Australia
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About the Author
Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Comment by christina on 15 July 2008:
I know Mr Editor- maybe you could do your meeting by teleconference, or by video chat