Welcome 2008 - Do you know where your paycheck went?
746 ViewsHere’s some more number crunching mind-numbing figures to ponder as you wonder where you paycheck went:
The best ‘investment’ for 2007 was wheat - up 110%. Gold was up 40%. Gold price lags wheat by 70%. Oil basically doubles (up 92%).
This is a a definite “I told you so” picture (1) (2) (3). Gold bugs just don’t get it. Their hoard of glittery shiny stuff is pretty to look at and was a far better investment then dollars or real estate, but certainly not the best investment around.
Gold went from approx. $600 to $840/oz/ so (840*100)/600 = 140% or plus 40%.
Oil went from approx. $50 to $96/bbl so (96*100)/50 =192% or plus 92%.
Wheat from approx. $4 to $8.4/bu. so (8.4*100)/4 = 210% or plus 110%.
Wheat price increased more rapidly as a percentage of its starting point than oil or gold. Actually, gold ‘performed’ more poorly than oil by approx 1/2 (50%).
Some of the former “I told you so” articles:
Food: The Single Most Important Asset You Can Own
Treasury Claims Power To Sieze Gold, Silver
A Good Reason To Store Food
Food Still the Best Investment
More Bad News For Gold Bugs
I’m not gloating, I’m just trying to get through the thick-headed skulls of the naysayers who are truly clueless what is happening to world food prices. I don’t know if any of them read this blog or not, but maybe somebody out there sort of famous will link to this and it’ll grow some legs.
Food is going straight through the roof because of oil, drought, biofuels, and topsoil losses. Food production is down, fertilizers and fuel are up. From the Fall of Civilization:
Gas prices in California to rise above $4 in 2008:
“If anyone expects gas to be less than a new record, they are not thinking,” said Fadel Gheit, senior energy analyst for Oppenheimer & Co. “There is no question it will be much higher than last year.” Americans will start 2008 paying about 65 cents more a gallon than they did in January 2007, according to the forecasts, and by April could see self-serve regular selling for $3.50 to $3.75 a gallon.
Experts say national $4 gasoline is just around the corner:
“More and more communities are going to see gasoline that approaches or exceeds $4 a gallon,” John Kilduff, an energy analyst at Man Financial in New York, said recently. “Where we’re currently at with prices, that’s a given.”
2008 will be known for $4 gasoline:
According to a recent poll on Daily Fuel Economy Tip nearly three-quarters of respondents believe that by the end of 2008 the national average gas price will have hit $4 per gallon.
Might I say “hogwash” to the above? $4 a gallon is dirt cheap compared to the rest of the world, and where fuel cost are really heading. If 2007 is any trend or indication at all, we can expect $4 a gallon much sooner then these claims above.
Anybody want to take any bets on the best investments of 2008?
January 3rd, 2008 at 5:25 pm
Europe pays $8 per gallon for gas now.
January 3rd, 2008 at 6:37 pm
FROM
http://news.xinhuanet.com/english/2007-10/31/content_6985664.htm
2007-10-31 22:50:04
BEIJING, Oct. 31 (Xinhua) — China will raise the prices of gasoline, diesel oil and aviation kerosene by 500 yuan per ton, almost a 10 percent rise, starting from November 1, China’s economic planner announced on Wednesday.The average retail prices of gasoline and diesel oil was lifted to 5,980 and 5,520 yuan per ton from 5,480 and 5020 yuan.
FROM
Global Marine Oil Pollution Information Gateway • Oil - how much …
Or: 294 American gallons = 1 ton of oil (ranging from 256 American gallons per ton of heavy distillate to 333 American gallons per ton of gasoline, …
FROM
http://www.xe.com/ucc/
1.00 CNY = 0.137482 USD or 7.2737 CNY = 1.00 USD
5,800.00 CNY = 797.081 USD
SO
$797 / 333 gal = $2.394/gal
[AKA cheap, relative to US/Eur]
January 4th, 2008 at 6:11 am
Just a thought… doesn’t the fact that wheat has increased in value much more than the other commodities suggest that a significant number of people DID get the message that it’s a good investment?
January 4th, 2008 at 9:04 am
It has increased in value due to it’s growing scarcity, which is the result of several factors: drought, crop loss, increase costs in farming and conversion of farmlands to biofuels. There is a worldwide wheat shortage or “crop shortfall” would be a better way to put it.
But it’s not scarce because “people get it”. Very few people are buying wheat from where I sit. And even if they did, it would be only the tiniest fraction of what is actually happening to wheat.
Nations are stopping their exports of grains, because “they get it”, realizing that they no longer have any certainties of feeding their own population. This, plus the losses above, is what is causing this price increase. Food has become the hot global commodity.
January 4th, 2008 at 10:17 am
In short, Admin is saying that wheat futures purchasing is not driving the price of wheat up, actual commodity scarcity is (i.e. supply relative to demand). Given that we KNOW that most other commodity prices (such as oil, milk, steel, etc) are being driven up by demand exceeding supply, this seems logical for wheat as well.
January 4th, 2008 at 7:52 pm
I agree with admin and fallout11; I was just wondering what people on here thought about the possibiliy. Thanks!