Time for Another ABG Economics Lesson

Dear ABG Readers: I have seen your comments and know some have nearly had their fill of posts about economics. I was going to lay off for a while BUT this (subs req'd) Paul Krugman NYTimes column was too good to pass up. Being green means holding onto your green, so please bear with me. It all begins with the recent stock market decline . . .
Krugman writes about three things in our current economy. One is the fear of bad credit - hedge fund problems impacting the stock market. The second is the magnitude and duration of the current housing slump. But outta the blue came the third major cause - no, it wasn't Britney Spears, Paris Hilton or even Lindsay Lohan. It is the persistent rise of oil prices - something I thought most everyone had gotten used to.

Krugman sees us as already coping with three years of high oil prices and that has happened without any big disruption in world supply to trigger it. It is just that supply is tight and that most new production makes up for the drop off in old field production. That is why oil prices are high - over $70 a barrel and staying so - despite no hurricanes, wars, terrorism or acts of God having happened. Where will prices go when those events do occur? Not down.

So keep reading ABG and trying to time what vehicle decisions you will be making in the near future. How far are you willing to drive to that new job? Should you move out to the ex-urbs? Whether you want new technologies or new fuels or both in your next vehicle purchase? The future has a knack of becoming the present pretty fast.

I live near a bus line. How about you?

[Source: New York Times]

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