critique on gas prices

First of all the economic relevance of this article is almost perfect for the purpose of this assignment, so listed by Dr. Kassens’ purpose for the assignment instructions. “It is crucial that you are able to apply the concepts covered in the principles course to the world around you.” The reason it is so appropriate is that gas prices affect just about everyone. Especially poor college students who are learning about economics. But commercial drivers and commuters to work and school are affected just as much as these college kids and this blog post makes a not of that and does well to point that out. However there are plenty of alternate energy sources to be used. The problem isn’t scarcity because there are plenty of alternate energy sources, but that oil is such a money making machine that no one will willingly invest in these other sources. I am no expert whatsoever so I read this and am inclined to agree with most of it because I would not know how to contradict it. Explaining about how the prices for gas affect elasticity of supply and demand is very informative and useful information in proving a point about the crude oil market. “I think that if a substitute was found for gas, the overall economy at the micro and macro level would face much less hardship. Businesses would be able to produce more at less cost and households would be able to spend more money on necessities and even leisure items.” I really hope so. I like buying what I want instead of pouring my wallet into my gas tank all the time. This blog post makes very good use of many of the ideas terminology, and concepts that we have been learning about at 8:30 every morning for the past month. I’m sold by reading this article and if someone who read this knew nothing about econ they could probably learn a thing or two. If I had to grade this I would say A to the writer and anyone who read it critically.

Rise In Gas Prices Critique

The rise in gas prices has been an ongoing problem for the past several years. In most working peoples lives, gas is an absolute necessity. I thought that this blog post about the article, Gas Prices Shift by Kris Maher in the Wall Street journal was very interesting and informative because much of what the article is describing relates to topics we have discussed in class. There are no true substitutes for gas, so people are beginning to make budget cuts on other things.
This blog tells that because gas prices are rising, it is ultimately affecting the overall economy and society. The author makes a strong point that because prices are rising, there has been a shift in demand for gas. This relates to what we have most recently learned in class concerning oligopolies and collusion. With perfectly inelastic supply, as demand shifts outward, prices will rise. The same holds true if supply decreases. As supply decreases, the price will increase. Gas companies can ultimately control consumer behavior in order to maximize their profits.
Though I thought this blog was very well done in relation to the newspaper article, I found one strong point in the article that was not discussed in this blog. The newspaper article author makes the point that higher gas prices could affect people that don't drive. Because of the rise in gas prices, The Meals on Wheels program in Canton, Ohio lost 12 volunteers because they couldn't afford to drive. The program that usually serves 2,000 people now can only give one meal a day to some senior citizens who usually are given two meals a day.
This idea that one person's own economic decisions, such as cuts in driving, can affect the overall economy. This idea was learned with Adam Smith's idea of the invisible hand. The invisible hand is the idea that one's private interest can lead to public gain, or in this case with rising gas prices, a loss.
The closing idea in this blog article is that as gas prices continuously rise, there is going to be a demand in a substitute for gas. I think that if a substitute was found for gas, the overall economy at the micro and macro level would face much less hardship. Businesses would be able to produce more at less cost and households would be able to spend more money on necessities and even leisure items.

Can Gold Investors Profit from Apocalypse 2012?

http://www.cnbc.com/id/42253645

Gold has been used as a form of currency for over 6,500 years.  In recent events gold prices have increased dramatically, mostly due to the the economic crisis of 2008.  The price for an ounce of gold has doubled in the past four years.   In July of 2007 the price for one ounce was around $700, today gold prices closed at $1,523 per ounce.  Analysts are predicting that demand will continue to increase causing prices to rise to $2000 per ounce by the end of the year.  Many people invest in gold when the future of the economy is uncertain.  Gold offers protection that the dollar cannot, if the economy were to collapse, the dollar would be about as useful as toilet paper while gold could be used to trade for necessary resources. 

“The current fears of 2012 disaster scenarios are not the only time gold has risen in price. Historically gold has gone up in times of great economic uncertainly, notably during the Great Depression, and more recently with Y2K fears a dozen years ago.”(Suciu)  With fears of the apocalypse coming on December 21^st 2012, now could be the perfect time for investors to buy.  If prices rise to $2000 before 2012, investors can experience a 33% increase in asset value from current prices.  As we approach December 2012, media will spread news of the Mayan prediction causing citizens to fear the possibilities of an apocalypse.  Those who believe, or even fear its possibility, will begin to hoard all the gold they can get.  This hoarding will greatly diminish the supply of gold, and as we know, once the supply curve shifts left, the demand curve and prices rise.  The investor, who purchased their gold with the intent to sell, is now faced with the issue of when to sell in order to maximize profits. 

Without a doubt, the gold investment should be sold before December 21^st, 2012.  Why? When everyone wakes up on December 22^nd and realizes that the sun did indeed rise, they will be eager to sell their excess gold.  This will cause the supply of gold to shift to the right and prices per ounce will plummet.  Even if you believe the world is ending, you should still sell your gold and you can use the profits you made to buy things that may matter during an apocalypse such as extra food, water, and survival gear.  If you don’t believe, you will most likely get a good laugh when you wake up on the 22^nd knowing you just made bank. 

Work Cited

Suciu, Peter. "Apocalypse 2012 — Special Report — What It Is And How People Are Profiting From It - CNBC." Stock Market News, Business News, Financial, Earnings, World Market News and Information - CNBC. N.p., n.d. Web. 23 June 2011. <http://www.cnbc.com/id/42253645>. 

In sickness and wealth

The article explains how the euro is still working and will remain the currency in Europe. The article stated that the value is staying at $1.44 and either staying the same, or increasing. In the month of June the value of the euro, which is $1.44, increased by 8%. If the euro remains popular and continues with increasing values then there is no reason change the form of currency. The euro has been steady and stable for all these years, so it wouldn’t make much sense to change the currency when encountering some troubled times. There will be ups and downs in the value of the euro, but overall in the long term run, the euro will be productive. There is also incentive to continue using the euro when the ECB offers yield advantages to investors who use the euro as currency. The title of the article is, Why the currency markets have not yet lost faith in the euro, and I believe that no body is questioning the euro until it begins to under achieve and come close to its shutdown point. The euro has been the traditional European form of currency and to just up and change Europe’s currency now is just stupid. Just because the world is in a recession doesn’t mean that we leave and change what has been working in the past. Continue to use the euro it has gotten you this far and is a stable and steady value. The form of currency you use is extremely important in life and people need to take pride in the consistency that the value of the euro possesses. I disagree and think that the euro will devalue because of the increase in money supply due to the bailouts. The euro can very easily lead to inflation.

http://www.economist.com/node/18866841

Outsourcing in America

In a small city near San Fransisco, the economic downturn has lead to outsourcing of public jobs within the city. The city of Half Moon Bay decided a few years earlier that outsourcing its public jobs would be an efficient way to cut costs. They first starting with contracting out the cities public works, engineering, lawyers, building inspection, and code enforcement. Recently they decided to contract out for a police department and the recreation department. The police department caused a bigger stir within the community than previous outsourcing. the city first fell into monetary problems in 2007 because of an 18 million dollar settlement over a blocked 83 house development. they needed to cut costs and they realized that the easiest way would be to outsource the cities public employees. Residents and former employees of the city have been hit hard by the news of the loss of their jobs and the outsourcing of those jobs to people who do not even live in the city. however this contracting is a growing trend in cities that are in debt. its an easy fix but doesnt not ultimately solve the problem that is causing the city to be in debt. I feel as if once again people are looking to take the easy way out instead of making the proper changes to the way the actual city is ran. it also shows no loyalty at all to the citizens of the town and could lead to a mass exodus because people do not agree with the actions of the city. although they save money by just contracting out the jobs, they also save money by not having to pay as many pensions. this kind of behavior is unethical and is not the way to treat employees and citizens of the city.

Businesses That Will Be History by 2012

America lives and dies by its competitive market. Each year businesses sprout up and die out as if it were by natural selection. Some companies have the right product at the right price to spark a public interest and others do not. In 2010, the biggest loser of them all seemed to be Blockbuster when the once superpower of the VHS and DVD world filed for chapter 11. Substitutes like Netflix and "public goods" like free viewing of movies and TV shows on the internet drove the powerful chain into the ground. In this globally struggling economy, expert economists have looked at businesses that are showing signs of trouble. It looks as though a few previously thriving businesses may have their number called in 2012.

Saab: The Swedish automotive company showed a budding growth from the 60's to the 90's which attracted GM to buy have its stock in 1989. What has slowed Saab's growth in the European car market was a lack of identity status. Saab does not make very inexpensive, practical, gas efficient cars like Volks Wagon. Nor does it make flashy, fast, luxurious cars like Porshe. Its potential buyers don't see the use in paying plenty for a middle of the pack Swedish car. Cadillac and Chevrolet also stole show as GM's largest players which made it difficult for Saab to develop as a brand.

Myspace: Once the world's largest social network that paved the way for Facebook has been surpassed by its pupil. In 2005 NewsCorp bought the site for $580 million which was considered a steal at the time based on its growth potential. Myspace currently has less than 20 million users whereas Facebook has just over 700 million. Facebook seemed to have more attractive features to a younger hipper group with better online security from unwanted viewers. While Facebook grew Myspace had no answer and now it seems to be a thing of the past.

Kellog's Corn Pops: Moms today are becoming more conscious about what they serve their kids. Kellog's describes this product on the box as "crispy, glazed, crunchy and sweet." It also has high counts of saturated fat and artificial sweeteners that substitutes like Cheerios and Frosted Flakes don't. But what may be hurting this product more than its contents is the high rise of the price of corn. Because corn and Corn Pops are compliments of one another, the price of the Pops rise with the price of corn.

http://finance.yahoo.com/family-home/article/112989/brands-disappear-2012-247

By Mark Manthe

The end of cheap goods?

The article I read was from The Economist and it was titled “The end of cheap goods? Some are predicting the end of the cheap “China price”; others are more sanguine”. This article is about the prices of goods and labor in China. Li & Fung is a large exporter of goods to the United States and Europe; about four percent of China’s exports to the United States are through Li & Fung. The CEO of Li & Fung, Bruce Rockowitz, feels as though the cheap prices associated with goods and labor in China is drawing to a close. He states that China was able to produce these commodities so cheaply was due to the death of former leader, Mao Zedong, and the unification of the country again. With the re-opening of southern China companies were able to come in and obtain land and labor at relatively no cost. Due to these low costs of production and close proximity to Hong Kong, a very large port for the exporting of goods around the world, production and exporting were made very simple. The article goes on to discuss an electronics fair and a graph on how the prices of electronics are falling. The article finishes with the quote “Chinese firms were curious about any product that lowered costs or made it easier to automate. When labor was cheap, Chinese firms used it inefficiently. Now they are learning how to get more from fewer hands.” My critique is that I would agree with the idea that the “cheap prices” in China are drawing to an end, of Mr. Rockowitz. Using what we learned in class we saw that a shift in demand causes a shift in prices. In the article they mention that there is “a wave of new demand, especially from China itself” and it “is feeding a surge in commodity prices”. Also they mention that the wages in China are increasing, which is most likely the cause of this increase in demand in China. Finally, with the increase in wages the Chinese will probably replace inferior goods with normal and even luxury goods.

http://www.economist.com/node/18805862