Wednesday, August 31, 2011

Annual Gas Price Forecast

I recently realized I had neglected to make my annual gas price forecast at the end of July, as is my normal habit (been doing it for about 8 years). Well, it isn't going to be so important in the future as it was in the past, as crude oil and therefore fuel will not be going into an ever growing shortage as was thought in the past. We now know of reserves that will sustain us for the next 40 years (sorry, I don't have a good supporting article for this) if need be. The "Peak oil problem," for the time being, has been defeated. Reliability of delivery is becoming a bigger question, but I will save that for another article.

As the world economy and more locally, the US economy have drifted into the doldrums, the price of oil has stabilized in the $80 to $90 range, and actually these numbers reflect optimism on the part of speculators that the world economy will improve. Should we slide into the dreaded "double dip" recession (increasingly unlikely, since Bernenky announced interest rates would remain near zero for the next couple of years), oil prices will slide back into the $70's of dollars a barrel.

Well, using my formula, $80 a barrel translates to $3.70 per gallon (regular unleaded, here in rural Texas), and $90 a barrel translates to $4.10 per gallon. Link

While that is still quite a range (but really only 10%), it is more dependent on politics and weather than it is on any predictable factor. Most importantly, it is dependent on how friendly (or, more likely, unfriendly) the current administration (read EPA) and courts are towards the oil industry, and how much our government devalues our money by printing more of it.

Friday, August 26, 2011

Preparing for a disaster

A hurricane is approaching North Carolina and the Eastern shore tomorrow (Saturday) and I heard some government official on the news last night saying:

Friday is a good day to prepare.

NO! Friday is the day everyone will panic. I even heard on the news Thursday night that some stores as far north as New Jersey were sold out of supplies.

Preparing is what you do a week before, or a month before. Or even a year before. Not the day before.

Tuesday, August 23, 2011

The Four Cylinder Engine

The Four Cylinder engine has been used in cars and trucks for around 100 years now.

Technically the first was in 1890, but in its second year of life (1913) the Chevrolet company was selling a car with a 4 cyl engine. They have been made with displacements from less than 1 to almost 3 Liters (although bigger ones have been made in the past). The inline-four is the most common engine configuration in modern cars.

Is it no wonder I have owned mostly cars and trucks with 4 cyl. engines?

I have considered a car with three cylinder engine, but I was formerly concerned about how long they last. Today it looks like they will last quite a while, but I think the jury is still out.

Over the past 7 years, the price of fuel hasn't consistently gone up, however, so fuel mileage may not be as big an issue as it used to be.

Tuesday, August 16, 2011

The Market Crash - Part 2

Well, what a difference a week makes. Or not. Everything seems to be settling down, the Dow, NASDAQ, S&P, and other indexes are settling. But things are settling a bit lower than when they started. Except commodities. Gold and Silver are still very inflated, and a few other commodities are up 10 to 30%. A notable exception is copper, which is slightly lower than it was a couple weeks ago. Oil, while down, didn't drop below $75 (or at least didn't stay there). Gasoline has fallen about 10 -20 cents, and this may remain as is for a few weeks, but not for long. And the 5 year T-Bill has dropped below 1% for the first time in history.

Here is what it all means. Ignore the indexes for now. And the credit downgrade. The indexes are very emotion driven and in the long run, don't mean much. The credit downgrade was something everybody knew was coming down the pike. Oh, yes, congress didn't do their job when it comes to reigning in spending, but rather compromised. But the better of the market managers saw that coming too.

The low interest rate on the 5 year T-Bill means two things. Much of the world thinks the US is very likely to be able to stay solvent for at least 5 more years, and there will be no improvement in the economy for the average man for at least 5 more years.

Gold and silver are way up. Most people don't trust the markets, and some don't trust the governments any more. Gold and Silver are a hedge against both market crashes and against the government printing vast amounts of money, resulting in high inflation.

Copper is down. Copper is used in industry. A rising price of copper would indicate a health industrial and manufacturing sector. That copper is declining is a forewarning that the industrial and manufacturing sector is not so well, and that another downturn is likely. That a pound of is still above the price of gallon of gasoline is a good sign, though. When the two prices reverse, a serious drop in production and thus in all other sectors of the economy is imminent.

Oil, while down, stayed above $75. This tells me the oil speculators think the worldwide economy will remain healthy. These guys lose there asses on a regular basis, though, so I am not so certain how much faith I would have in them.

Monday, August 08, 2011

The Market Crash

The "market" crashed a couple days ago, and everybody is in panic, but the actual economy isn't really any different than it was two weeks ago when the "market" looked good.

While the latest drop in numbers coincided with the budget deal in Congress, they were not caused by that budget deal. The issues in Greece, Italy, Ireland, and Spain overshadow our problems. The news from the European Central Bank and our own manufacturing outlook report (numbers from the ISM about our manufacturing sector show only 8 of the last 20 months the manufacturing employment picture was positive) were the cause, with a little help from China saying their economy might also be slowing down. And this all came in a week.

Don't get me wrong, the budget deal was a bad one, with Congress still kicking the can down the road on the debt and the disasterous spending levels that have been going on for several (about 8) years now.

This has become like pushing the bus over the cliff. The TEA party pushed candidates into Congress to stop the bus from going off the cliff, and this deal amounts to "well, we will let you push the front tires over the edge, but then we must talk about finding a way to keep the rest of it from going over for a while.

The liberals argument was spectacularly disingenuous. To say that the conservatives were going to cause the US to default on its bonds is like calling up your bank and telling them you won't be able to pay off your Mastercard with your Visa card unless the bank increases your limit on your Visa Card. But if they do that, you promise to reduce the amount you spend in the future, but not reduce it to what you make.

As for the overall outlook for the economy, in light of the employment data released today (and last month) and the probability of global famine that I wrote of last week, gloomy just doesn't convey a strong enough message. To put it bluntly, the economy, from the perspective of the jobs market, will not see any real improvement for several years - if it ever does. Our failure to see the road ahead, and our outdated tax code (we should have changed over to sales based tax code before now, and taxed sales on the Internet as well) have more than likely doomed our nation to be thrown on the scrap heap of history.

Now, it is just a matter of how many years before the disaster arrives. It could be two, or it could be twenty-two. Either way, I don't see much chance that we will recover. The last real recovery was in the mid 80's. The ones in the late 90's and then in 2004-2006 were fake, phoney, bubbles doomed to burst. And indeed, at this time, our economy is a bubble built on another bubble.

I will have to write more on this later, as I have run out of time

Thursday, August 04, 2011

Defending against Heresy

In these times, when there is little persecution in the US (there is some persecution and even arrests from time to time for true Christians in the US) it is easy for counterfeits to pass themselves off as Christians. For the lay person, the best security against heresy and counterfeit christianity is expository study of the Bible.

Expository study of the Bible means to expose the underlying meaning. This isn't some mystical or secret way of looking at the Bible, but rather, it simply requires close examination of what the Bible says and the comparison of one passage to other passages throughout the Bible, such as comparing the description of the Birth of Jesus to prophetic passages in the Old Testament that foretold of His coming. An expositor is a teacher that teaches the Scriptures by going through passages a few verses or a few chapters at a time, rather than teaching topic by topic.

There are about 100 or so events and stories in the Bible, we Christians (at the very least) need to know most of them, and know the underlying lessons for most of them. And this is just a start. Don't worry, you will never know all there is to know about the Bible, or even all there is to know about any major book.

Today we have many tools to assist with Bible study that were not available in the past, some not even a few years ago. MP3 players (like the I-Pad) are one such tool, allowing you to listen whenever and wherever you have time. I listen while driving to and from work (about 40 min each way, since I drive slow) I have found two excellent "Expositors" on the Internet, with extensive audio files that can be downloaded and listened to on an MP3 player.

One of the oldest and best known is Dr. J. Vernon McGee, who made more than 400 hours of recordings, specifically as an expository study of the Bible. He finished a 5 year tour of the Bible, and he called it the "Bible Bus." It has been playing on more than 100 radio stations around the world for many years.

He finished the 5 year study in the mid 70's and it has been repeated every 5 years ever since. He established the benchmark for all expository study, and I have been going through his "tour" for over two years. Because it was made just for radio, each of his recordings is exactly 26 minutes long, and contains about 22 or 23 minutes of his teachings.

Now, I will say that I don't agree with Vernon McGee's interpretation all of the time, but I do agree with him the vast majority of the time. Also, since he teaches the Scriptures without getting too entangled in the politics of the moment, when he makes a commentary on society, it is surprisingly relevant to the current day's issues.

The only downside to Vernon McGee is that he has a fairly steep, old English, vocabulary. It will, from time to time make you wonder what he is talking about, unless you read the King James Bible, Shakespeare, or some other classical literature.

Chuck Smith did a similar tour of the Bible, around 2004, for his evening Church group. While I haven't listened to very much of his recordings (about 15 hours, or so) I have listened enough to know he teaches well. The advantage of his recordings are the language he uses is less old English, and therefore easier to listen to. There are two disadvantages, both related to the fact that he did them for a live audience. First, since it is a live recording, some bits and pieces refer to things in the audience, that you cannot see. Second, since they were not made for radio, the length of the recordings varies from about 20 min to around 2 hours.