Them Fleet sales are what keeps Ford going.

But Fleet sales also mean steep discounts on each truck sold.

Don't forget the SuperDuty in 2016 which Ford ardently timed just in time for Obama to leave office, when the economy may finally start to recover.

Ram also timed its real refresh for this year also. Then the real new Silverado 2 years after Obama leaves. This is not just coincidence and have this all planned, folks.

Housing will get better some day, but coming up on 6 years into the Obama presidency...

What economic recovery?

By Stephen Moore

August 07, 2014

President Obama was doing a little jig on the tables last week at the White House – figuratively, or course – when we got a decent jobs and GDP report. Mr. Obama even chided those who would dare question his economic stewardship by saying: “Since I have come into office, there’s almost no economic metric by which you couldn’t say that the U.S. economy is better and that corporate bottom lines are better. None.”

Oh really. Well, you could have fooled the American people. The disconnect between the way Washington and Wall Street describe the state of the economy, and how real Americans feel its impact, is as wide as the Grand Canyon.

A new Wall Street Journal/NBC News poll finds that 64% of Americans are “dissatisfied” with “the state of the economy” versus only 35% “satisfied.” And 71% of Americans think the country is “on the wrong track.”

The disconnect between the way Washington and Wall Street describe the state of the economy, and how real Americans feel its impact, is as wide as the Grand Canyon.

Apparently the big boom in the economy President Obama is boasting about hasn’t trickled outside the borders of the Washington Beltway.

Here’s the problem. Nobody believes the statistics out of Washington and often for good reasons. A 2% inflation rate. Ha. Most Americans see the rate of price increases for the things they have to buy – milk, bread, vegetables, medicines, health insurance premiums, college tuitions, gas at the pump – rising at sometimes two to three times faster than the official CPI.

Even more laughable is our headline 6.2% unemployment rate. It’s that low, of course, only because about 5 million Americans have dropped out of the workforce – probably because they aren’t having any success finding a job. The real rate is closer to 12% and Americans know it.

And what about our vaunted 4% GDP growth rate from April through June? That’s a good number for sure, but in the first three months of the year the economy shrank by 2.1%. Oh and the feds lowered the estimates for how much the economy expanded in the previous three years.

For middle class families so far in this recovery, which officially began in June of 2009, real median household income adjusted for inflation has fallen by more than $1,500, according to Census Bureau data. That’s some recovery.

We would have just about $2 trillion more GDP according to the Joint Economic Committee of Congress if this economic recovery had been as strong as the Reagan recovery. In other words, if that money were evenly divided to all families, the typically family would have about $25,000 MORE income to spend every year.

And here’s one more economic statistic that is much worse today than when Mr. Obama entered office. The national debt is $7 trillion higher. This is the Obamanomics spending and borrowing binge hangover. How many decades will it take to pay all this off? That party is over.

Probably the dreariest assessment by Americans in the new Wall Street Journal/NBC News poll was that 76% -- or three or four Americans “don’t feel confident” that their children’s generation will be better off than this generation. Yikes. The American Dream appears in big trouble for a lot of Americans after the terrible recession of 2008 and 2009 and the Obama recovery.

In 2009 Joe Biden promised a “summer of recovery” but five years later we are all still waiting for it to arrive. The poll also finds the public hates politicians and the way our political system is working to solve problems. And that’s the least shocking result of all. It turns out people aren’t as dumb as Washington thinks they are.

Stephen Moore is a Fox News contributor. He serves as chief economist at the Heritage Foundation.

http://www.foxnews.com/opinion/2014/08/07/what-economic-recovery/

I believe the resurgence of the truck market that we have seen is related to pent-up demand since the US recession started. I don't associate it with home ownership.

It's been said many times that during the last 6-8 years people have been holding onto vehicles longer than ever.

The US housing market is unpredictable and not a good baseline to measure other markets with. I personally think that we will see another housing bubble burst within the next 3-5 years.

I certainly agree that in the past homeowners have owned pickups because they were a cost effective and useful tool in getting all the handyman work taken care of that is associated with home ownership. I think that at present, however, people are being increasingly priced out of the truck market.

Trucks are no longer affordable as they once were and looking at a $40-60k purchase is no small decision. I know people who have only used a pickup for Home Depot runs and appliance purchases only to realize they didn't really need a truck.

Most if not all home improvement stores will now deliver anything you need. The same is truck with retailers who sell large items. Thus the need to own a pickup simply for hauling large appliances and plants has greatly diminished.

My argument is that the truck market is going to only retain buyers who need a truck for work or those who need it for part of their lifestyle (boating, RVing, etc). If a truck won't be used on a regular basis for actual truck related tasks, it makes no sense for the average consumer to pay the price of a new pickup plus the costs in fuel to drive on as a daily driver.

A 40 year old truck would be sufficient for a homeowner.

And homeless people will be needing the brand new ones

"there are several reasons to be optimistic about the future...booming oil industry...a key player in the increase in pickup sales....2010 just 187 oil rigs were running in the U.S.; now there are almost 1,600."

Remember when Bush said “drill baby drill” and Obama said it would never work?

It's even worse than that. The Obama administration and media is currently trying to take credit for the oil boom when they have done nearly everything they could to stifle it. Similar things happened in the Clinton administration.

I can only envision America’s energy independence and the number of rigs that would be running now if a true conservative such as Sarah Palin were at the helm. Under the corrupt, anti-American, pro-union regime of obama and his gang of thugs, the oil industry has been crippled with burdensome regulations and outright bans on drilling. When Conservatism triumphs, drilling will start in ANWR and other regions that obama and his henchmen have placed on the verboten list - off the coast of Florida, in the gulf, off the coast of California, federal lands, etc. When that happens — not if — for a Conservative resurgence is poised to happen, the future of truck sales will exploid and China will be reduced back to its prior state as a mewing, cowering third world country and the muzzie nations will live in constant fear of a mighty, oil-rich America.

Also, can you imagine how terrible our economy would be today if it were not for these new oil technologies? If oil were $150/bl or higher and gas at the pumps were $5/gal thanks to Mr. Oil-Hater and his clean green cohorts in Washington running things, our inflation would be terrible and our economy in chaos with these clueless assclowns causing further panic.

What’s grievous is that the dems and the media are trying to claim credit for achievements in oil when they had nothing to do with it—and in fact— where ever possible—sought to kill it.

Same thing happened in the 1990’s. Clinton fought newt tooth and nail to raise government spending. All newt did was to halt the rise in government spending while rising revenues from the dot com revolution balanced the federal books. Clinton creamed newt for his efforts and then took credit for the balanced budget that he had nothing to do with. A balanced budget is now Clinton’s legacy.

Same thing is happening with Obama.

http://www.fool.com/investing/general/2013/05/29/why-fords-next-f-150-could-fail.aspx

I am sure Fleet sales will help the F150 but then again even Fleets have to insure them.

So once these Fords start hitting repair shops and body shops we will really know how they will do.

Statistically 1/2 of pickups sold in the USA are used for work. That would mean there is a linkage between work and sales. Leading up to the housing collapse many people kept using the artificially high market value of their homes as collateral against other loans or remortgage their homes to pay off the trucks, boats, trailers etc. that they purchased.

Blaming a President for poor economic growth is scapegoating at its finest. Globally the world is struggling to recover. The USA is no longer in the same position it was in the Ronny Raygun era.

It is typical of politicians to take all of the credit when things go bad and to point the finger elsewhere when times are hard. We forget that bad regulatory policies from previous administration lead to the problems that we see now.

Countries with more rigid controls on lending institutions and on stock market practices have faired much better than the USA.

sorry meant with things are going well.

"It is typical of politicians to take all of the credit when things go bad"

Yup, posting to articles over a year old speculating... You will sing a different tune if Ram were to do the same thing. This brand humping people really take away from this website. Just like how I can use any name real easy.

Junk

Waste of Time

RAM BIG HORN 1500

@Greg Stevens

I appreciate your sentiment and I imagine that many other readers on this site agree with you. However, drilling is a smaller part of the picture than our declining dollar. As long as investors can't predict what the value of the dollar will be in 3 to 5 years, no one will risk their capital on the chance to grab some future revenue streams (which is why people save and invest).

At present, and dating back about fifteen years, it make sense to put your cash into hard goods and hard assets such as real estate and precious metals. These this generally give you little growth but in most conditions they are a safe place to park your money.

Unfortunately, putting money into old housing or gold coins does NOTHING to create jobs. Investing in oil only creates jobs for the guys who are in the supply chain.

The wealth that is created in places like Silicon Valley (or Brazil, China, South Africa, etc) is the return on investment for guys who took a risk on those places or new ideas.

Yes, to less government interference in the energy business, or housing construction, but as a nation we will not endure much more of the monopoly money that keeps gushing out of Washington. It is killing jobs, investment and capital formation.

@papa jim - There needs to be less government interference in the way of manipulation. The laws they pass and the way they dole out money creates imbalances. Those imbalances favour 1% of the society.

Governments are supposed to exist to make sure the society it represents conducts itself in a safe and orderly and fair manner which ultimately ensures the survival of the society.

""Government of the people, by the people, for the people, shall not perish from the Earth."

@LouBC

please respond to the gist of my message--sincerely interested in your reply.

To recap, the thrust of my message is that until America has a stable dollar it's hard to get excited about investing in the ideas and systems that create good jobs.

Large numbers of Americans putting money into hard assets is a waste of capital and a clear symptom of a sick economy.

I agree with Hemi Monster about the truck market. People have held onto their cars and trucks much longer because of the economic crisis in 2008 and forward. There is only so long that people will hold onto their vehicles before they then replace them. Trucks use to be an affordable vehicle that provided a lot of utility for the money but now they have become very expensive. Those who use them for work and the hardcore truck owner will continue to buy trucks but many others will go to more affordable vehicles. The sales of trucks will level off and still be big profit vehicles for the manufacturers but they will sell less of them. It is hard to say what will happen but trucks could possibly level off to about 25% of the total market.

As for blaming a President for all the economic woes our economic problems began before Obama. Recessions and economic booms come in cycles and neither lasts permanently. Silicon Valley and the tech boom of the 90s helped get the US out of a recession and if anything a boom in new technology would be the cure for economic woes. The US will never get back all the jobs that have been lost in manufacturing but through new technologies and finding new ways of doing business will create jobs, but only for those with the necessary skills and education. I do agree with Papa Jim that buying precious metals and like items are not investment in the economy. Uncertain economic times cause more to invest in precious metals and not risk their capital.

Yup, posting to articles over a year old speculating... You will sing a different tune if Ram were to do the same thing. This brand humping people really take away from this website. Just like how I can use any name real easy.

Junk

Waste of Time

RAM BIG HORN 1500

Posted by: Ram Big Horn Junk | Aug 9, 2014 12:08:55 PM

Does not matter when the article was posted the article is putting forth an example of "Why Ford's next F150 could fail.

It raises a good question due to the choice of materials Ford used in the construction of this truck.

Now put away your hate and open your mind for once.

I work on one of those oil rigs and the most popular for us is the Ram Pickup.
We get $750/month truck allowance so we can afford to buy the best.

As long as the current morons running this country continue printing money with nothing to back it up, we will not see an economic boom. The stock market is artificially inflated to give people the illusion that things are getting better.

Most homes took a huge hit in value (In many cases 20-40%) over the last 4-5 years. Owning a home used to be an investment, not so now days. It's as risky as the stock market.

I do see Ford as a little more optimistic than myself.

I don't forsee a complete recovery in the US like the 'good ole days'.

I see a collapse of the stock market, just look at the value of stocks.

Instead of using unemployment figures, all government's should use employment participation as the figure they throw around. There has been a 10% drop in people employed as a total of people of working age in the US.

Look at how many have left the middle class. Look at how many can afford new homes when (if) US economic activity lifts.

Borrowing and cheap money seems to be the order of the day and this can't last forever.

The US will not become a third world nation. I do see it becoming harder to have that American Dream.

Also, I read an interesting article where pickup sales have not kept pace as a percentage of total vehicle sales. Pickup sales have increased, but not at the same rate a cars.

The newer and future pickups will cost more as well and are becoming more and more SUVs.

Of the pickups sold, yes half are for business, like here in Australia. But over half of them are a business write off and don't do any work.

Even with the local oil industry increasing in the US, oil prices will not lower. Global demand is what drives commodities.

If oil drops in price, this means less economic activity. So, what do you want cheap fuel and no jobs, or pricier fuel and jobs?

papa jim - IIRC, stability of a currency is based on whether or not people are buying it and that is based one whether or not they feel it is a good investment. There are multiple factors that affect how people see a country's currency as a good investment.
The USA government is deeply in debt. That plays a role in the safety or risk in buying that currency.
Government plays a huge role with policies but does pandering to the 1% increase that stability in the long term? Social instability can destabilize the currency just like financial instability.
You have spent more time than I studying currency and ultimately I'll defer to your expertise in the matter.

But as I said before, "Governments are supposed to exist to make sure the society it represents conducts itself in a safe and orderly and fair manner which ultimately ensures the survival of the society."

If a country's dollar is unstable that would indicate that a government is not functioning well and neither are its institutions.

The current problems we see in the USA and globally have been brewing for decades.
Tribal bickering between the left and right and typical myopic political decision making make the problem worse.

@Big Al--There are a couple of reasons for the boom in new car and truck sales. One is the easy low cost money and another is just that there is only so long that one can keep a vehicle. The average age of a vehicle on the road is at an all time high which is about 12 years old. Another thing is there are some that are doing extremely well and will buy more higher end vehicles. Higher end items are doing fairly well. I don't think the US is going to slip into 3rd World status anytime soon but I don't see us keeping our Number 1 for very much longer. It is true that are middle class is endanger but even that could change. Rebuilding infrastructure and developing new technologies could bring new jobs. Also if the US were not No 1 but still in the top tier of World powers maybe we would be less inclined to have a military presence around the World. The US needs to take care of itself first.

@Jeff S -= the gap between the so called "haves and have nots" is growing. The higher end of the middle class is okay but the mid to lower end is rapidly becoming the working poor.
Cheap car loans are driving new vehicle sales and so are leases.
The fact that long term cheap and easy loans are also available for used cars are also driving sales.

Cash for clunkers removed a large source of lower priced vehicles from the market which helps drive sales of more expensive used vehicles.

The real reason this guy is optimistic is because there still aren't any new players in this game.
You can choose from sucky truck number 1, 2 or 3 and if you don't like it, tough. You'll drive what we give you. These automakers haven't given anyone with more than a double digit IQ a reason to buy any more pickup trucks and fleets like mine are going to other things like vans (which used to cost more than pickups). But the folks who are retired and want a king ranch and billybob the contractor thinks he needs a fully loaded superdoodie with 12" lift will just get a loan for one. It is the latter two buyers that the Automakers want because they'll pay whatever and they'll drive the same ole thing so none of that costly development needed. These buyers not only don't care about fuel economy, they actually scoff at the mere idea of improving it. Just as long as you shimmy over enough crossovers into the truck category, you're in compliance with CAFE so you can continue with the real money makers, large trucks and SUVs.

@Big Al, the relation between jobs and the price of fuel is not dichotomous. Yes, high employment can contribute to increasing oil prices because the demand goes up. But if you increase the supply, you can keep the price down. All these regulations we have that supposedly protect us restrict supply. We should be supplying as much energy as the market demands, not the amount that politicians say. OPEC countries have a target dollar value for oil, so they restrict supply to prevent the price of oil dropping below that threshold. Free market for everything is the only way to go. You name it: energy, healthcare, food, communications; fewer regulations and more supply and competition will bring down prices. If oil became free market, investors will sell their stocks and the price would come crashing down like it should. But greed will always prevent that from happening.

@Lou BC--You stated just what TTAC has been covering about the cheap car loans. If you have good credit and qualify for the no or low interest rates on a new car or truck you are better off buying new especially on a Toyota, Honda, or any vehicle that maintains a higher resale value. That could be another reason why new vehicle sales are up especially if that consumer would normally buy a late model used vehicle but can qualify for the factory incentive financing which come out a much better deal. Cash for Clunkers took the low older cost vehicles off the market but these would be those who cannot afford any other type of vehicle. To some degree you are correct that those low end customers will be forced to buy a more expensive used vehicle but then there are many of those customers that simply cannot afford to pay anymore. On the other hand there is no guarantee that used car and truck prices will stay high. Eventually there will be a glut of used vehicles on the market.

...stability of a currency is based on whether or not people are buying it and that is based one whether or not they feel it is a good investment. There are multiple factors that affect how people see a country's currency as a good investment.

@LouBC

The point you makes is simply wrong on several levels. I'm here to help!

1. Would you say that the stability of the number of inches in a foot has to do with the way people feel about it? If I'm bullish on rulers would my measuring tape have more feet or inches than another person's tape? Would it be possible to devalue a ruler or a meter?

2. Did you really call cash (or money?) an investment?

Answer: A foot is always 12 inches and a yard is always 3 feet. Exactly the same, a dollar is a "measure of value." It has no value of its own, it's just a piece of paper, unless it can be used to reliably "transfer value" from one person or one account to another.

Unless that measure of value has the same kind of reliability as a good quality ruler or yardstick, it's useless.

As an investment goes, the dollar is horrible--it's been crashing in value for the better part of 43 years.

Granted, there are some old certificates that numismatists (collectors) want to stash away, but typical paper currency is just that: Paper.

Talking about stable money has nothing to do with politics except that we will soon see the various political parties fighting over it. Stable currency is a must if you expect people to risk their wealth and capital over new ideas.

You cannot have equity in a bundle of dollars, but you can have equity in a house or a business. This is worth learning about. I did.

there is no guarantee that used car and truck prices will stay high. Eventually there will be a glut of used vehicles on the market.

@Jeff S

There is always a glut of used vehicles, Jeff. Unless you live in Cuba! If there wasn't a glut, used car prices would be very high. Cash for clunkers was a political stunt, very forgettable.

Unless you can afford to own a bunch of specialty vehicles, you should ignore brand names and search for bargains--focus especially on the most versatile vehicle you can afford.

Global demand is what drives commodities. If oil drops in price, this means less economic activity.

@Big Al

Please review the price of crude during the last 80 years. An ounce of gold buys the same amount of crude oil today as it did in 1935.

Look it up!

In more recent terms, in the seven years leading up to July of 2008 when crude hit a nominal all-time high, the price of oil in euros rose 198 percent.

In Swiss francs it was up 216 percent—but measured IN DOLLARS crude had spiked 459 percent.

The price of oil averaged roughly $23/bbl. in 2001, but today July 7, 2014 its price is around $100.

At first glance, the price spike might suggest a scarce resource, but consider the value of the dollar vs gold. Though the dollar bought 1/280th of a gold ounce by the end of 2001, by the end of 2013 it bought roughly 1/1300th.

What this unquestionably reveals is that the commodities are priced in volatile dollars, it’s almost entirely a story about the relative strengths of a particular currency, yet people like Big Al and Jeff S never tie the two pieces together.

@Papa Jim--If you know anything about me by now I do not buy on brand allegiance but in getting the best vehicle for my needs at the best price. Most of today's vehicles will give you good reliable service for many years. I have owned very few bad vehicles. The prices of used vehicles are not as high as they were and in a few more years they will go lower when more come off their leases.

@papa jim
As economic activity become more homogenous across the globe a 'dollar isn't just a dollar' anymore.

It is measured against other currencies.

Yes in the US the dollar has it value, but like here in Australia the USD isn't worth what it was a short while back.

So, when the US needs to import it will cost more for product.

The USD has strength at the moment because the US economy is still quite large.

As other economies become larger, with more stability you'll see the USD become more volatile and prone to greater fluctuations.

There's an old adage which doesn't hold as much credence in the 21st Century, "when the US economy sneezes the world caught a cold". During this GFC the US had acute bronchitis and not much happened outside of the OECD.

Why? Because countries outside of the OECD constitute 50% of global trade.

As for you crude oil comment, crude prices will only rise. Like all industries it cost a certain amount to extract and process oil.

Oil is becoming more technically challenging and expensive to extract and process.

Your view needs to modernise concerning finance and economics. What you state might have been true several decades ago. But then the US was much more influential in the economic standing of the world. This is much reduced.

Net cash flow from US shale has been negative year after year, and some of the industry’s biggest names have already walked away.

The seemingly inevitable outcome for the US shale industry is that, once investors wise up, and once the drilling sweet spots have been used, production will slump, probably peaking in 2017-18 and falling precipitously after that.

The US is already littered with wells that have been abandoned, often without the site being cleaned up.

Read more: http://www.smh.com.au/business/carbon-economy/why-the-shale-gas-fracking-fad-is-the-new-dotcom-bubble-20140805-100igf.html#ixzz39wnQpF4x

@papa jim - people see currency as an investment. Just like they see stocks and bonds as an investment. It is as you say just paper but its value is affected by people who see it as something to be bought and sold.

Government policy affects the value of the currency since they control how much is printed and they control how much of that currency is actually backed by gold or other "hard" commodities.

A country that exhibits instability will not have a stable currency.

Equity is affected by other factors just like money. The housing collapse was caused by a combination of bad financial policies with poor oversight. That was combined by an artificially high house value. A large number of people ended up with zero equity. In some respects the same thing happens to money.
We see governments play games to artificially shore up or devalue currency. The Chinese devalue their currency by investing heavily in other countries.

You actually didn't answer your question about how one stabilizes currency.

The US is already littered with wells that have been abandoned, often without the site being cleaned up.

@Big Al

Oil technology has made more oil available.

The scenario you describe has always been thus. Drillers put down dozens of exploratory wells in hopes of finding one that has potential.

Site cleanup? Where do you get this stuff, Al?

@Lou

Paper money has no equity, this is even true of the desirable currencies.

It is only a unit of value, just like a gallon or a liter, or a bucket. It's not the liter that makes your car go, its the fuel held in the one liter vessel.

Imagine trying to build a skyscraper if the designers and engineers had to start each day with a new set of measuring tools!

The dollar measures value, but by itself it has no value--it's only a means of transfer. It's not intended to be an investment.

@papa jim
Imagine trying to build a skyscraper if the designers and engineers had to start each day with a new set of measuring tools!

WTF is that scenario? Something from a second grader?

Imagine if your neighbour decides to build a skyscraper as well. What would happen?? Steel and concrete prices rise. Supply and demand.

Economies are more or less based on supply and demand.

The scenario you just presented is what happen in a very socialized and controlled environment.

You claim to know about money and markets??

@Big Al

I'm referring to the role of currency as a UNIT OF VALUE. If the unit is constantly being re-valued, its usefulness is toast!

Same with measuring devices. You can call an 11-inch ruler a foot all day long but it will still only be 11 inches long. Same for the greenback. The dollar needs to be as stable as the common measuring devices we use every day.

It was that way for most of American history. This modern mess started in 1971 when Pres. Nixon's treasury secretary chose to "take the dollar off gold." The rest is history.

Discussing skyscrapers may be over your head but I'll try. If the units of measurement are constantly shifting, the building will look pretty goofy when it's done.

@papa jim
The unit of value you are referring to is highly variable, it is never constant.

Make an attempt and factor the variables that impact currency. The "ruler or tape measure" you speak of doesn't exist, not in a supply and demand situation, combined with growth and loss.

Instead of trying to define 'currency' as a set measure look at it as a percentage or ratio in which variables can affect it.

10% is a set amount, but what does 10% represent? Currencies are the same. $10 represents what today and what tomorrow??

That aspect or concept you need to get a grasp of.

The unit of value is measured globally and internally within countries, hence markets where people gamble.

Just don't gamble, it appears you will lose out, unless you are promised a set amount. But then the return will be less, as risk is reduced.

If you need more financial, economic, etc counseling, just ask, I'll assist.

@papa jim - thanks for clarifying. I now see the point you were trying to make.

Two very fine looking trucks at the top of this page...go Ford..and the reason that fleets buy so many is because they want a reliable, dependable truck that is not in the shop all the time. not perfect but still the best, and even without all the fleet sales would still outsell Cram and Generic motors, you have learned something here today Cram little horn 1500..

@papa jim
You brought up the 'skyscraper' scenario.

But, yes the dollar is only a representation of a market. But the market is in constant flux and the dollar is in constant flux determined by the market, etc.

As a measure it changes everyday, so your skyscraper couldn't be built one day with an 11" foot and the next a 13" foot. That was my argument.

The skyscraper made for a bad analogy.

A major problem with the US dollar is that it is backed by the full faith and credit of the US. When the Government accumulates too much debt it is too easy for the Government to print more money which makes it cheaper for the Government to pay off its debts but inflates the value of the dollar. This was Government policy during the Vietnam era which lead to the inflation of the 70s and to the economic mess of the late 70s and early 80s. It is just too tempting for the Government to circulate more money to solve economic problems.

@Alex--Reading your comment about increasing the supply of oil there is one part of the equation that will keep domestic prices higher--limited refinery capacity. There is little incentive to increase refinery capacity and many of the major oil companies have closed or sold off their refineries. We can increase drilling but unless refinery capacity is increased then the price of crude and its products will remain high. The last time a major refinery was built in the US was in the mid 1970's.

@Jeff S

sorry to be a nag, Jeff, but the day to day price of crude oil is set by the buying/selling in global commodities markets. American refining capacity, or lack thereof, has very little impact.

Such an assertion might have been true 40 years ago, however. Today so much of the world's oil market is destined for international ports that constraints on American supplies only have a minor impact, and not a lasting impact. Hope that helps.

You can call an 11-inch ruler a foot all day long but it will still only be 11 inches long. Same for the greenback. The dollar needs to be as stable as the common measuring devices we use every day.

Big Al,

I'm re-printing the above quote because it should be crystal clear to anyone who's sober. Do you actually read the stuff you post before hitting the big button?

How many pints did you have before making your witty remarks yesterday?

Answer: you have no way to tell because you're saying that units of measure are irrelevant. You could have had six pints Wednesday but the same amount of grog might have been 10 percent less on Friday because you say it depends on global standards. Good luck with that.

By the way, I stopped drinking ethanol based beverages about 6 mos ago. Now my commentaries are more value packed and brilliant than they were last year.

Now if we can just agree on the number of days in a month or year--should we have a vote at the UN to settle that or just let the markets decide?

@Papa Jim--Refinery capacity has an impact upon prices of refined products in the US. You can drill all you want but if you do not have enough refinery capacity then product supply will be limited. Globally yes the price of crude is effected upon supply and demand. I was talking about the price of product which if there is limited refinery capacity the price of product will be higher regardless of the price of crude. It is much easier to build a refinery in India or China than it is in the US. As a matter of fact the major oil companies have and are building mega refineries outside the US. There is little incentive to build or expand refinery capacity in the US.

@Jeff S, I agree. When I talk about increasing supply, it's increasing the whole supply chain, not just the raw commodity. That would include the refinery capacity. Any bottleneck in the supply chain limits the supply of the finished product, and keeps the price higher.

constraints on American supplies only have a minor impact, and not a lasting impact.

@Jeff S

I'm standing on the above statement. I was referring to global prices. The largest impact on American consumers continues to be the declining purchasing power of the US dollar.

You don't believe me? Try going to a grocery store!

@papa jim
Writing again the way you are, illustrates that you don't understand what you are writing completely.

papa jim, where you are wrong, is a dollar is not always a dollar.
Sure an inch will always be an inch, no matter how you look at it, but that value of a dollar changes all the time.

When the average middle class working American works nearly 6 months of every year to pay the ever increasing tax rate, that does not leave a whole lot of extra cash for things we want but don't need.

@HD you are probably too young to remember a time when the dollar was pegged to the price of an ounce of gold.

That system worked for almost 200 years but in 1971 our government took the dollar off that standard.

The last 40 years have mostly sucked for America's place in the world, and for America's middle class.