The markets are indicating that the open will be fairly nice. The S&P Futures vs. Fair Value are indicating (at 7:30amCT, an hour before trading begins) that the DJIA is poised to open up roughly +85 points, and the S&P500 is poised to open up +12 points.
If I had to guess I’d say this week is going to be good for equities, as I believe the VIX is currently too high and could have a mini implosion, causing stocks to trade higher. Also the ECB could provide a half a trillion euro stimulus package. To me that spells higher stock prices.
Overnight in Asia and Europe shares traded mostly higher; while oil slumped roughly 3 percent to $47.11 per barrel.
Can someone please tell me why the price of a gallon of gasoline, averaging today $2.054, according to AAA (Press here to see their “Daily Fuel Gauge Report”) is less than the price of a gallon of milk, averaging in December 2014 in the USA at about a price of $3.82!?
See the graphics below from the BLS, who tabulates the CPI. They are now releasing CPI and current and historical price figures of individual components of the CPI (Press Here to search and discover the CPI’s component data). They have info on prices everything from bananas to oil to milk, and much more! As you can see, according to the BLS the average price of a gallon of gasoline in the USA in December 2014 was $2.56 (for unleaded regular), but also the average price of a gallon of milk in the USA in December 2014 was $3.82.
Now, we all know that there are many scare goods and resources, and cattle, who produce milk are scarce, but oil is a fossil fuel, and is depleted every year surely faster than Mother Earth can produce it, so it’s very scarce!
To me then, I can’t seem to figure out how in the world a gallon of gasoline is cheaper than a gallon of milk! I’ve gone bananas! Gas to me, in my mind, is more scarce than milk; therefore gasoline (aka fuel or petro) should cost more than a gallon of milk. It’s amusing to me how we as a society all pretend, in the financial markets, that fuel, gas, petro, is an unlimited natural resource, and that we can extract from the earth as much of it as we want, when we want to!
Someday, the earth will run out of oil altogether. Imagine that scene! Oil prices would shoot up and rapidly spiral upwards higher, going parabolic, like a shooting star! Prices of light sweet crude oil would increase towards the heavens faster than NASA’s Space Shuttle launches! The financial markets would plummet, people would panic!!! This is just the beginning.
How would goods and services be distributed? Nearly everything in today’s modern contemporary society would fail.There would be lawlessness and utter and complete chaos. There would be an enormous recession, no… An ENORMOUS DEPRESSION! The depression that would ensue would make (what I call “The Greater Depression,” or “The Greater Slump” of) late 2007 to early 2009, or even the Great Depression look like a total joke! People would (or may) starve, and dehydrate, and die in mass. It would be an utterly tragic disaster for humanity to deal with.
Perhaps there would be enough alternative vehicles (powered by hydrogen fuel cell or electricity) to transport food and water to the people in mass? There would have to be a huge humanitarian aid governmental response. Workers would have to be shuttled to the water treatment facilities and coal fired power plants in governmental electric or hydrogen fuel cell busses. The government would have to transport food and water via hydrogen fuel cell and electric vehicles to the masses perhaps from rail road (which also would have to immediately switch to hydrogen fuel cell powered locomotives). It would be an immediate disaster and a major state of national emergency.
The world’s financial markets, the stock and bond markets would go absolutely hay wire! People would likely “sell everything!” Surely, stocks would plummet worldwide. If that day ever comes, I hope to short the stock indices using options, most likely I’d go long stock index puts.
Perhaps when oil is so cheap, the governments worldwide, should seriously be considering replenishing their Strategic Petroleum Reserve for any potential national state of emergency or disaster? What are our nation’s leaders thinking (if at all anything!)? Can they think?
Gasoline cheaper than milk! Seriously?! WTF is or has been going on?! It sounds like a nutty fictional book or crazy fallacy of mankind.
Speaking of “going bananas,” the average prices of bananas in the USA were in December of 2014 just $0.585 per pound. On average ten years ago, in the USA, prices of bananas, in December of 2004 were just $0.474 per pound (see the graphic, or press here for the root source of the data).
So there you have it… I’ve “gone bananas” over the price of milk and fuel per gallon in the United States!
Bernhardt Capital Management LLC 