China.

That’s one of the first reasons used to explain the raise from 60 cents to about 90 cents, everyone knew that China have a large population, and it is modernization within the last 10 years meant a high demand on gasoline. The reason why I said it was an ‘excuse’ and didn’t make much sense is simply because China have its own oil fields, and they would rarely import gasoline, if they did import it on a regular basis, this report would be pointless. Hence it is irresponsible to pin the blame on the Chinese accusing them as the cause of high gasoline cost. Which of course after several months, people realized and this haven’t officially came up since summer 2008 began.

Demand.

This can be answer by you, the reader. Does fuel cost crosses your mind when you are buying a new car, if you are buying a new car? Would you not reconsider before taking that gas sucker, which goes a 1L/5KM of gas before you go anywhere?

The demand for gasoline was always here, ever since the days of the first leaded gas automobile. This demand will always be there as well, the only thing that might have changed between the 80s and now are that our car’s engine are WAY more efficient.

I find it difficult to believe that because of more efficient engines, and an aging baby boomer population, we have a higher demand on gas.

MyView

There are several more reasons flying around, some of them include ‘unknown’ issues. I would say that there is a reason why Gas prices can be so high, and maintained its prices there. It is the only thing keeping us from going into a world wide recession.

My theory is that since the burst of the sub prime mortgage bubble, most major countries’ economies have been heading downward. For those who lost monies in the sub prime crisis, their goal should be to regain their losses within the shortest period of time. Hence, the most ideal strategy would be to make that money back from a highly demanded, limited supply goods. In this case crude oil was chosen instead of other less used resources such as natural gas or electricity. This is my theory, that once a gigantic portion of the deficit is regained, we’ll see the gas price drops back to around a dollar/L. This, as most people would say, must be near the end of this summer.

After using them for nearly a month, I am not sure if its the attractive graphic ads or the low priced merchandise on their ads, some of my readers started clicking their ads. Initially their pay per click rate is defaulted to 0.28 cents per click and would be marked in Red. After a few days, it would turn black and the number would change. In Widget Buck’s terms, they call it finalized. The black numbers are what I am being paid.

After joining them for a month, I’ve seen several pretty amazing PPC rate, my current highest is around 64 cents, and the lowest is at 18 cents. It seems to be my current most profitable source so far, even better then GoogleAds.

The special is still on, if you want in, you’ll still get that 25 dollars bonus if you following this link to join them.

Being landmass connected to the United States, Canadians are now some of the most blessed citizens on this planet. With the Canadian Looney being above par to the dollar, what used to be cheap to Canadians when the Looney is of lesser value has just become even cheaper. With this, it is reasonable for Canadians to flood to the States for their shopping needs.

This sudden revelation lifted the cloud of fear from my worries, at least World War III won’t be initialized on the grounds of rescuing a slowing economy. Is this flood of foreign shoppers the reason for a lower dollar? The United State’s resolution to the recent market problem is to become a foreign currency sponge? As we all know, the devaluation of the dollar is related to the deficit of the U.S. Government. This deficit is mainly caused by the non-ending war on Terrorism which lead no where. If George W. Bush were to introduce fear into the market by hinting that he plans to start another War, the Dollar might take another plunge, simply based on fear.

As all market watcher must know, the U.S. economy is heading towards a recession, the only question remain is when. This recession worries began with the low housing sales in the United States and was further more extended by the after effects of the Sub Prime problems. If there are no apparent solutions to repair or atleast contain the damages, the U.S. economy would enter a stage of retraction and drag the rest of the world with it.

How can a government ensure recession arrive and depart quickly? The answer is simple, increase its citizens’ spending and earning power! At points in histories, government had used projects to combat recessions. The theory is basic, if people can earn money, they are usually more willing to spend or invest. Spending or investing would reignite other sectors and create more jobs in those sectors. Workers in those sector would be more willing to spend or invest, and would slowly restart the entire economical cash flow cycle. However this style of recession combat can only be used in developing economies. Take Ontario for instance, the construction of the 407 might initially be planned for such purpose.

However, the challenges the states is facing right now is a nation wide problem. Construction projects such as express routes can’t be easily organized on such short notices. On top of that, the express route system in the states are already well established. With the government seeing red in their books, the next logical choice would be to lure foreign shoppers and investors into the market.

Using foreign buying power to reignite a slowing economy would have a similar effect as projects from the Government. The only difference is that this money isn’t from their own tax payer’s pockets but other countries. My guess is that the states would continue on this route of ‘foreign support’ until the market is capable of exiting the recession period and stand on its on feet.

These are my speculations on the subject.

Starting in August, where most of us are first introduced to the word ‘Sub Prime’, we have witnessed a global financial fallout. Ever since, investors have forseen an upcoming recession and attempted for a way out. They were later comforted by the Federal Reserves’ interest rate cut in September and therefore upheld the investing market. However, as each companies’ quarter reports are released, even the Bank of Canada had recently admitted that the Sub Prime problem is more serious then their initial predictions.

At this point, I am not sure how much more the Feds can do. Interest Cuts are only ideal for a short term revival, like electricity for a dying heart muscle, if you shock it too many times, you might end up with an ill effect. Since nothing can really amend the ever growing domino effect caused by the Sub Prime incident, I believe the Feds have taken steps for a backup plan, another war.

War traditionally help boost the economy for the winning countries. Weapon stocks, financial stocks, gold prices, oil prices and oil related stocks would all enter into rally mode. We can easily see this effect by comparing the gasoline prices from 1999 and compare it to today’s gas prices.

By going to war, it might give the market a well needed boost. But the men and women that are sent on this journey may have to sacrifice themselves for the well being of the economy, which is also part of their home and country. One of the events that hints at a possible war is obviously President Bush’s words, as recorded in my other post World war 3? You gotta be kiddin right?, some other hints includes the recent bombing in Karachi, which most likely targeted Benazir Bhutto. The South Korea’s visit North, also seen as initial steps of reunification, which is most likely fueled by the U.S. refusal to aid in the rescue of the then captive South Koreans. There are many more hints, where all results leading back to the progressively failing U.S. economy and somehow portrayed its enemies in a negative way. Is it really wise to head for War just so recession can be delayed or prevented? I don’t have an answer to it, but I pray I don’t have to find out one day that every penny I made from the stock market was drawn from the blood and soul of some poor person who’s job was to protect their home and country.

TSX, cumulatively dropped 142.83 points since the Market open on Monday, October 15th. There were many reasons to this sudden drop, on the list is the BoC (Bank Of Canada) maintaining its interest rates without a cut or a raise, another important drag is the neighbor’s Dow Jones.
The Dow dropped a cummulative of 180.14 points since the Market reopen on Monday. On the list that of reasons, the one that stood out for me was Bernanke stating that the sub-prime problem is having a larger impact that it should and the funds  established by banks to regain the credit lost in the sub-prime problme… So, really, only one problem, Subprime!