What a great thread!!!! I have a handful of buddies from high school (30+ years ago) and we stay in touch via email and argue/debate everything from religion to politics to literature to springsteen vs the doors vs zeppelin. This reminds me a little of that.
Shortage? We ain't got no stinkin' shortage? Right....
The American consumer has benefitted for years by cheap consumer goods coming from places like China. Now the chickens are coming home to roost, as Shibumi's opening graph shows.
America's economy is essentially flat and in pure American style assume everyone's economy is flat therefore how can there be increased demand. Yet companies like Caterpillar, who export over 50% of their sales, are booming with record profits...and declining NAFTA sales. Hmm.....
The developing world is now competing with America for an essentially stable supply. Globally demand for food, energy, steel, basic minerals etc etc etc.....are going thru the roof with prices following. The price of steel scrap now exceeds the price of basic hot rolled steel form a couple of years ago. Steel.....has more than doubled in cost over the last 2-3 years. Oil.....has exploded in price. What was the Obama quote about fancy salad stuff?
Corn is being diverted from food to methanol...prices of chemicals are going thru the roof because of the demand for fertilizer.
Basic economic principle....what happens when demand exceeds supply?
Other basic economic principle....who invests in businesses where returns don't justify the investment?
Why bust "Big Oil" for not drilling down into things like shale oil or refinery capacity? We as consumers benefited with a gas pump price that was largely flat for years and years. But....oil companies hardly benefitted from that. If you went back and looked at Exxon's profit picture as compared to ......say Duke Power, Microsoft, Wachovia....for years 1996-2005 my guess is you'd find a profit picture that isn't that great. Are they making money hand over fist now? Heck ya!!! Go look at Nucor while your at it. But when they are making marginal profits is i reaosnable to expect them to be making huge investments in R&D or capacity? Great companies will...but how many great companies are there (or people, soccer clubs, etc).
And speaking of doing nothing.....raise your hands if you (like me) have bought an SUV in the last 5 years? Big butted, gas guzzling vehicle. We love it. But in a time of $4-5 per galon gas.....is that smart?
Guess its easier to blame George Bush or Exxon or Southern Baptists.
