Tag Archives: Inflation

More Proof That The Gray Lady Is Hurting !

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Street level view of the new New York Times building (photo credit: pentagram.com)

Five months ago, we wrote about job cuts at the New York Times (a.k.a. “The Gray Lady“). This week, the New York Times announced their latest price increase. Once again, Times readers will pay more, but get less (that is, those readers who remain readers despite the price increase). And New York Times readers don’t even get their favorite comics. To our knowledge, the New York Times has never had a comics section.

The weekday editions will go from $1.25 to $1.50, a 20% increase. This increase comes just twelve months since the Times raised their cover price 25% for weekday editions, and about 15% for the Sunday edition. Prior to the last price increase, the Times was able to do without a price increase for eight years. Viewed another way, these two price increases in one year’s time equal a 50% increase in the cover price of the New York Times weekday editions. Our salary hasn’t increased 50% in the past year …has yours? Sadly, the New York Times print editions may just be a luxury we can no longer afford.

More frequent price increases for many consumer products is the norm these days, We believe it is further evidence of an economy in deep trouble. Newspapers are getting it from all sides… Advertising revenue is drying up, readership is down, and production costs are way up, particularly paper, electricity and fuel. As if that wasn’t bad enough, the Internet and “new media” have turned out to be the newspaper industry’s worst nightmare. Newspapers are trying to embrace the brave new digital world, but it looks like they may be waging a loosing battle.

The squeeze has been evident to readers of the Times for quite a while now. The paper is shrinking. Their flagship product, the Sunday New York Times, is a shadow of it’s former self. Help wanted display advertising in the Sunday business section, once perhaps 75 or 100 pages every Sunday, has completely disappeared. Complete Sunday sections have disappeared. What’s left is an anemic Sunday edition that sells for an incredible $4.00 !

The voracious technology hounds at Routing By Rumor like to read the New York Times on Tuesdays, for the Science section, which has been contracting as well. We used to enjoy the Circuits section on Thursdays, but that section has disappeared, replaced by one to two pages of articles buried towards the back of the Thursday Business section. We suspect the Science section will go A.W.O.L shortly, as well.

All this bad news at the New York Times just happens to come at a time when people seeking their 15 minutes of fame have been flocking to the new building the Times has built, one block from New York City’s Times Square (named for the site of a previous building the New York Times’ occupied at One Times Square,  during the early 1900’s). It seems people have an irresistible urge to climb up the outside of the their brand spanking new skyscraper, like so many spidermen.  The fact that their new building sports what amounts to ladders on it’s exterior walls is too much for some adventure or publicity seekers to ignore.

Hu Totya/Wikipedia)

The New York Times building under construction, 9/16/2006 (credit: Hu Totya/Wikipedia)

We propose a solution that could only happen in New York City, home to Coney Island’s famed Parachute Jump, the Empire State Building, Yankee Stadium, and the site of the deadliest attack in our nation’s history.

Why not sell permits to climbers who want to scale the New York Times building, sell tickets to the spectators, sell the television rights to one of the networks, and use all the money they earn to subsidize the print editions of the New York Times. They could even place corporate logos on each floor, similar to how ball parks plaster sponsor’s ads on every nook and cranny at the ball parks. This plan may be so successful, they will be able to give away the Times for free. Remember, you heard it hear first.

Of course, safety will be an important part of this plan. Climbers will need to have the proper climbing equipment, safety nets will need to be installed, and spotters will have to supervise the climbing. Perhaps some bleachers can be built along Eighth Avenue. A giant LCD screen in Times Square (like there aren’t enough of those already) could let people follow the climbers.

David Scull/New York Times)

Alain Robert climbs the New York Times building on June 5, 2008 (photo credit: David Scull/New York Times)

Think this plan is crazy? Then you probably won’t think much of the latest attraction a few blocks away in New York’s Central Park. For the incredible price of $25, you can ride a helium balloon 300 feet above Central Park. Really! …And you thought the helium balloons in the Macy’s Thanksgiving Day Parade were cool.

Only in New York.

– Routing By Rumor

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The $10 Gallon Of Gasoline Is Possible, But They Still Won’t Wash Your Windshield !

How high will the price of a gallon of gasoline go? Regular grade gasoline is at or above $4.00 a gallon across the United States now, and crude oil is hovering in the $135 a barrel range. In fact, gasoline is close to $5.00 a gallon in some areas, and diesel fuel is averaging just about $5.00 a gallon across the nation.

At these prices, you’d think a whole squadron of singing “Texaco men” would descend on your car when you pull into the service station, cleaning your windshield, checking your tire pressure and oil level and polishing your headlights. As the jingle promised, “You can trust your car to the man who wears the star… The big, red Texaco star” (or maybe it was “the big, bright Texaco star”). Today though, all you’re likely to find at your local gas station are self-service pumps. If you’re lucky enough to find an air hose to inflate your tires, you’ll probably have to pay for the air and do it yourself.

U.S. DOE EIA\'s Gasoline Price Graph

This gasoline price graph is linked from this U.S. Dept of Energy EIA page, and

should display their current data. For EIA’s Diesel Fuel price history, click here.

We have previously questioned what a flareup in Middle East tensions might do to the price of crude oil. In today’s news, there was speculation that an Israeli military exercise earlier this month may have been a not too subtle hint that they may be preparing to (or at least want to appear to be preparing to) attack nuclear facilities in Iran.

There has been speculation that if Iran reacted to an attack by blockading shipping in the Strait of Hormuz, the price of crude oil on the world market could quickly hit $300 a barrel. The Strait of Hormuz is a 21-mile-wide strategically important body of water between Iran on the North, and the United Arab Emirates and Oman on the South. It is the only shipping route for much of the oil exported from the Persian Gulf.

Just how serious is the threat of an attack on Iran? Mohamed ElBaradei, head of the United Nations’ International Atomic Energy Agency, said in an Interview on Arab television on June 21st, that “any military strike on Iran could turn the Mideast to a ball of fire” (see CNN article). This raises the possibility that the United States, the United Nations, or an international coalition might take military action to keep the Strait of Hormuz open to shipping to keep oil flowing.

The brilliant mathematicians at RoutingByRumor (they stay in our ivory tower) figure that a $300 barrel of crude oil would equate to a gallon of gasoline in the $10 to $12 range. That is, if you are able to buy it at all. Could you imagine the prospect of a $200.00 fill-up at your local gas station? We think the oil companies might have to start using armored cars to deliver the gasoline to their stations. Carjackings might become commonplace, not for the vehicle, but for the contents of it’s gas tank. Imagine what these stratospheric fuel prices would do to the American economy, which is already hurting because of the price of oil.

What we think future gasoline deliveries might look like !

For many Americans, we think gasoline at $10.00 a gallon would quite literally make it too expensive to commute to work (unless they are lucky enough to be driving one of these vehicles). Many Americans without access to public transportation would simply be better off staying home. Imagine what $10.00 gasoline will do to food prices, already spiraling out of control because of the current price of crude oil. People unfortunate enough to have oil heat will be unable to heat their homes.

So there you have it… Record high gasoline prices, military posturing by Israel towards Iran, warnings of an apocalyptic conflagration in the Mideast, and the supply of crude oil from the region hanging in the balance. Things do not look good for oil or gasoline prices or an uninterrupted supply.

You know, that old pair of inline skates in the attic, and that rusty old Schwinn in the garage are looking better every day now. Or maybe we will get a Delorean like the one from Back To The Future, with a “Mr. Fusion” Home Energy Reactor that can run on banana peels and half-empty cans of beer.

Dr. Emmett Brown (Christopher Lloyd) fuels up his Delorean’s fusion

reactor with banana peels and beer, in Back To The Future

(credit: wikia.com)

– Routing By Rumor

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The Commodity Crisis Du Jour – Gasoline… Rice… Now Corn. What’s Next ?

Jerry Edle, left, and Dave Lanz keep an eye on a large
propane tank which they are towing through a flooded cornfield,
in Oakville, Iowa, Monday, June 16, 2008.  The tank floated away
during flooding. (from yahoo.com - AP Photo/Sue Ogrocki)

As if the American economy and the American consumer weren’t being pinched enough by $4.00 to $5.00 a gallon gasoline prices, here comes another big hit.

The flooding in the Midwest will have a major impact on corn prices (see this article), corn supply, and a ripple effect that will be felt in almost all food categories, from breakfast cereals to meat and poultry, to soft drinks and every other food item that contains corn or corn-derived ingredients. Examples of important corn-derived products are corn oil and high fructose corn syrup. They’re used to produce everything from margarine and soda pop, to french fries to bakery items. And rising prices and shortages of corn-derived ethanol will simply fuel higher gasoline prices. Ethanol production was already putting a strain on corn supplies and driving up the price of corn even before the flooding in America’s corn belt impacted this year’s crop.

A police officer \

A police officer demonstrates his finely honed public
relations skills, and welcomes home a resident of
flood ravaged Cedar Rapids, Iowa (read story)
(AP photo/USAToday by Seth Wenig - Caption by RoutingByRumor)

Just like the rising price of crude oil, rising prices for corn will have an almost immediate impact on the cost of many of the things you buy. In fact, corn probably plays a more important role in the food chain than wheat, rice, oats, or any other grain.

If you thought the size of the box of your favorite breakfast cereal was shrinking, you ain’t seen nothing yet. If corn prices go through the roof, you’ll need a microscope to find your cereal boxes. Maybe we’ll switch to shredded wheat.

We expect that in addition to seeing rationing or purchase limits on rice at the supermarket, you’ll soon see shortages and rationing of corn and products containing corn as a major ingredient.

Better start stockpiling the Doritos and the Corn Pops.

– Routing By Rumor

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The Price Of Oil Is Increasing 150% A Year ! Is The $200 Barrel Of Oil Too Far Away ?

It was just over three months ago that we noted that the price of crude oil had passed $100 a barrel for the first time ever. Now, in less than four months, it has increased another 40%, and is closing in on $140 / barrel. Almost every day sees a new record high for the price of crude, and Friday was no exception. That equates to an annual increase in the price of oil somewhere around 150%. Based on the past few months, we think oil might hit $200 a barrel before the end of the year. If you think the U.S. economy is in trouble now, imagine what that will do to it.

Gasoline is at or above $4.00 a gallon in much of the U.S., with predictions of $5.00 to $6.00 a gallon by the end of the summer. It seems that those economic stimulus checks that Uncle Sam and his nephew George W. were kind enough to send y’all are little more than a gift to the oil companies and market speculators. Being able to afford to fill their gas tanks is the number one concern for most Americans now.  You would think that sky high gasoline prices would make a big enough dent in demand that there will be no gasoline shortages.  The truth is that the underlying cause of high prices is a tight supply and global demand for oil.  Because of this, we believe the next gasoline crisis is not too far down the road.

Look what fuel prices have done to the market for larger vehicles. Truck and SUV sales have dried up to the point that the market resembles the real estate market. Car dealers and real estate salespeople have joined the exclusive club once reserved for the Maytag repairman.

If you think increasing food prices and inflation in general are bad now (don’t believe the fairy tale statistics that Washington tries to feed you), just watch what happens over the next few months. Inflation, the cost of energy, and the economy (yes, Virginia, we ARE in a deep economic recession) are such problems that they have succeeded in replacing Iraq on the front page of your newspaper for the past few months.

These concerns have prompted the economic gurus at RoutingByRumor to come up with our top ten list of concerns that Americans are faced with…

  • Skyrocketing gasoline prices (try filling your tank)
  • Skyrocketing food prices (try keeping food on the table)
  • Energy prices (try heating/cooling your home)
  • Inflation (try to keep up)
  • Skyrocketing healthcare costs (try getting sick)
  • The real estate slump (try selling your home)
  • The foreclosure crisis (try holding onto your home)
  • The deteriorating job market (try finding a decent paying job, or any job at all)
  • Stagnant or decreasing wages, benefits and income (especially investment income)
  • The lack of leadership in Washington (try to find a real President)

Gee whiz… terrorism, illegal immigration and global warming didn’t even make the top ten. That’s how bad things are.

– Routing By Rumor

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A Lesson From The Bush-Cheney School Of Economics, Washington, DC

Main campus of the Bush-Cheney School of Economics, Washington, DC

<wishful-thinking>

OK class, ready for today’s lesson?

Good …Repeat ten times after me:

We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession.

Very good. Now, to recap…

We are not in a recession.

Any questions ?

Yes, the fellow in the back row, go ahead…

“Professor Routing By Rumor, you are repeating the administration’s claims, and telling us that there’s no recession, yet there are signs everywhere you look that tell you otherwise. In fact, Professor, you’d have to be deaf, dumb and blind to not see proof everywhere that we are indeed in a deep recession, or worse. You know, Professor, denial is not just a river in Egypt !”

I’m the professor here, and there’s no recession because I said there’s no recession. That’s sort of like how it works in Washington, too. All they have to do is adjust the definition of a recession to fit their needs. And for every fact you can produce that proves we’re in a recession, they can dredge up ten that will prove we’re not in a recession. Of course, they haven’t lost touch with reality completely, and they realize that they have to admit to some bad news. So they tell us we’re inching close to a recession, but that the U.S. economy is still healthy. Maybe a tad sluggish, a bit of a downturn, a slight dip perhaps, but not a recession. Definitely not in a recession. Call it anything you like, but don’t call it a recession.

</wishful-thinking>

<reality>

Today, while discussing the latest employment figures, President Bush said “That’s a sign that this economy is not as robust as any of us would like it,”. Saying that the U.S. economy is not as robust as we would like it is like saying the Titanic was not as waterproof as they would have liked it. Mr. Bush wins first prize in the Routing By Rumor understatement of the year contest. He gets two (2) one-way tickets from Washington, DC to Texas, valid until January 20th, 2009. We figured he’d want to take Laura home with him, so we thought the second ticket would be a nice touch. If he wishes to use the tickets sooner, so much the better for the U.S. economy, not to mention the mess in Iraq.

The economy is getting worse on a daily basis. Bankruptcies, foreclosures, layoffs, and downsizings are at record levels. The cost of living is going up at record levels. Gasoline and food prices are increasing daily. We’re starting to see retailers ration some foods. Decent paying jobs with good benefits are becoming harder and harder to find, if they exist at all. The real estate market is in horrific shape. Interest income has evaporated for millions of seniors that depended on it to survive, and you can’t find a good place to invest your money… certainly not Wall Street.

You are probably asking yourself when the administration will start being honest with the American public, so here’s what we believe to be a likely timetable…

It’s a pretty good bet that hell will freeze over before the Bush administration acknowledges a recession.

Expect to see Osama Bin Laden release a video apologizing to America, before George Bush admits what 99% of America already knows.

You will see Cuba become the 51st state before the White House levels with you about the economy.

Chances are that Venezuela’s Hugo Chavez will proclaim his love for America before George Bush takes off his rose-colored glasses, and sees the world the way everyone else does.

Iran and Hamas will each profess their love for Israel before you hear the “R” word coming from George’s lips.

Shites and Sunnis will be kissing each other and dancing in the streets of downtown Baghdad, on the same day that the New York Times prints the headline “Bush Says Economy Is In Recession”.

Friends, it just ain’t gonna happen.

</reality>

Oh… and while we’re on the subject of hell freezing over, here’s something you’ll see when that happens.

credit: worth1000.com & talkintrumpeter2

– Routing By Rumor

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$4.00 / Gallon Gasoline Is On It’s Way. Can You Say “Fill’er Up”?

arm-leg-las-prices-512-x-501.jpg
Tom’s Shell in Madison, Wisconsin (photographed 4/25/2001)

And you think things are tough now?

Just when you thought it was safe to pull into the gas station, the experts are predicting that oil prices are going to continue their upward climb.  Oil has been closing at new record highs almost every day lately.

Actually, we think that all Americans expect to see  $4.00 $5.00/ gallon gasoline pretty soon.  Well, all except President Bush. He hasn’t been in the loop when it comes to energy prices (or most anything else, apparently). Here’s a CNN video of the February 28, 2008 press conference where Mr. Bush expresses his utter bewilderment that the experts are predicting $4.00 / gallon gas. Kinda surprising, considering that he is from an oil family, from Texas, and the leader of the free world. Then again, we don’t think Mr. Bush has had to pull any of his limos up to the pump lately. To be fair, he did say he knew “it was high”. Speaking of being high…

We think he would have been just as surprised to hear that gas has been over $3.00 / gallon for some time already. Here’s the full transcript, (where you will also find a link to video) of the entire press conference.

We know you don’t get out much these days, George. What, with the war in Iraq, and having to give orders to shoot down spy satellites and save the world from deadly hydrazine and all. But you DO surf the Web, don’t you? You do read this blog, don’t you?

We were actually hoping the spy satellite would land in our backyard. Your car gets twice as good gas mileage on hydrazine as it does on unleaded premium. We would have dragged that sucker into the garage and pumped it’s tank dry.

If high gasoline prices cause you to run out of gas when far from home, here’s one solution.

Readers can do their part. Next time you’re at the gas station, snap a picture of the gas prices, and e-mail it to the President. Unfortunately, the White House contact page lists Vice President Dick Cheney’s e-mail address, but not the President’s. Send Mr. Cheney the photo, along with a note asking him to please wake up the President and show him the e-mail. While he’s at it, perhaps Mr. Cheney can have Al Gore pay Mr. Bush a visit, and teach him how to use the Internet. After all, he did invent it.

Next time your gas gauge says “empty”, don’t bother pulling in and asking for five or ten bucks worth of gas. They’ll laugh you right out of the station. Could the $100.00 fill-up be too far off? Gas is reportedly already above $4.00/gallon in some places, such as San Francisco. Once it tops $5.00, that $100.00 fill-up could be the new reality. Can Americans afford this? What about the impact this is having on the cost of consumer goods!

The economists at RoutingByRumor predict that you’ll see gasoline break the $4.00/gallon mark this summer. And if unforeseen problems arise in the Middle East, you could see it go much higher than that. When your economic stimulus check arrives, don’t forget to take it with you to the gas station. Just think of it as President Bush’s gift to “big oil”.

If you think inflation is out of control now, you ain’t seen nothin’ yet. See our recent post about what the price of oil is doing to the U.S. economy.

As Esso (or was it Humble Oil) used to say, “Happy Motoring”.

Hybrid and electric vehicles are looking better all the time.

– RoutingByRumor

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Oil Closes Above $100.00/Barrel, Toilet Paper Closes Above $1.00/Roll, Wal-Mart’s Quarterly Sales Surpass $100 Billion and Postage Rates Are Going Up Again !

All of these increases are related, and they all spell serious trouble for the U.S. economy.

Energy costs are driving up the price of all consumer goods and services. Raw materials, production and transportation costs are all being pushed higher because of the price of oil.

U.S. crude for March delivery jumped $4.51, closing yesterday at $100.01 a barrel on the New York Mercantile Exchange. The previous record close was $99.62 on January 2, 2008. It has never closed above the century mark until now.

In a recent shopping trip, we found single rolls of Scott toilet tissue selling at a national drugstore chain for $1.15 a roll. I’ve never seen single rolls of toilet paper priced at or above $1.00 a roll. The cost of paper products seems to have increased 25-30% within the space of a few weeks.

And with Americans hard pressed to stretch every dollar, Wal-Mart continues to post record sales figures despite the widespread belief that retailers such as Wal-Mart are major contributors to the nation’s economic problems. The United Food and Commercial Workers (UFCW) union says Wal-Mart employs more than one million U.S. workers, earning an average of $8.00/hour.

If you need a better feel for what $100 billion actually means, it’s the same as saying “one hundred thousand million dollars”. It’s $100,000,000,000.00 …and that’s just for the fourth quarter of 2007. That works out to more than $1 billion a day, or put another way, more than a thousand million dollars every day. That translates to $400 billion a year if they continue those figures for four quarters. At this rate, Wal-mart, the world’s largest retailer and the largest private employer in the U.S. (see this UFCW fact sheet), will have a trillion dollars in annual sales before long.

The prices mentioned above are significant milestones, even if the specific numbers are not economically significant. It’s similar to when U.S. gasoline prices went above $1.00/gallon for the first time, back in the Summer of 1979. We feel that they portend even higher prices in the near future. Expect sharp increases to continue in the cost of living and inflation. Expect the size of those rolls of toilet paper to continue shrinking, while the price continues heading North. If you have any letters to mail, better do it soon. On second thought, use e-mail.

Trips to the supermarket are getting more painful every week. All of the basic grocery items, bread, milk, eggs, cereal, etc. are rising sharply. For instance, we’ve seen the price of a dozen eggs almost double in the last few months. Too bad gasoline doesn’t taste better, because milk is now almost double the price of gasoline, per gallon. It makes you wonder if the cows are the ones who are getting milked. We’ve seen some bakeries raising prices so often that they don’t even wait until their old packaging is used up before they raise the price. They are covering the printed prices on their plastic bags with stickers showing the new price. I’ve seen that some boxes of cereal have shrunk to less than 9 ounces. For instance, I spotted a 8.9 ounce box of General Mills Cheerios.

Who decides on these strange product sizes? Did a committee of pricing experts say that 9 ounces was way too big, but 8.75 ounces looked too small ? It’s voodoo marketing. It’s deception engineering. What’s next? The 8.1275 ounce box of Kellogg’s Frosted Flakes?

We can’t remember any time in the past 30 years that the cost of living has risen so sharply and for so long a period of time.

Just nine months ago, the Postal Service raised the first class postage rate (up to one ounce) by two cents, to 41 cents. They have just announced another increase to take effect this Spring. No wonder they introduced their “Forever” stamp. They saw these frequent rate increases coming, and probably wanted to limit the public outcry. Unless you have lots of money to tie up in “Forever” stamps, the idea of locking in your postage rate is pretty meaningless. You’d be much better off investing your money anyway. What we need is the “Forever” gallon of gasoline and the “Forever” quart of milk. Shoppers going to the supermarket are behaving more and more like stock market speculators every day. Should I buy that loaf of bread today? I really don’t need bread yet, but it might be 30 cents more tomorrow. Better fill up the car today, because the radio just said the price of a barrel of oil hit a record high yesterday, and that means the price at the pump will be going up in the next couple of days.

With these almost daily price increases and product downsizings, what we need is a new way of tracking the true cost of living. Forget about the U.S. government’s inflation index. Forget about the “market basket” price surveys. Forget about The Lundberg survey of gasoline prices. What this country needs is “The RoutingByRumor National Toilet Paper Price Survey”, adjusted of course, for the shrinking size of toilet paper rolls. Laugh all you want. We think it will be a very accurate gauge of inflation.

– RoutingByRumor

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