Keeping the Junkie Hooked up
Keeping the junkie hooked up is what they called it when the reagan administration got the gas prices back down in the early 90's. The big oil OPEC guys in Saudi Arabia said on a 60 minutes program that they want oil per barrel prices to go to $75. A price that I don't think is quite low enough to restabilize the consumer fears on future automobile purchases. They said that they have at least 50 years worth of oil in that one single oil field and are ready to tap the field. It was also said that the oil only costs them around $2 per barrel to get it out of the ground. So they are wanting a $73 profit per barrel. This price per barrel is about where people stopped buying cars like they used to because they were afraid of where things were going.
So, if the oil guys really want to stay in business, they need to do what they did in the 90's by keeping the junkie hooked up. I think that if people had some assurance that prices per gallon weren't going to skyrocket again that people would find their way to their new car dealers to buy more new cars. But with all the volatility in the oil market and prices going back up I don't see any end in sight to suggest that people are going to race to the dealership to buy the new cars on the lot.
If they push prices back higher like they have been over the past few years, then I fear that we're not going to recover from the slump were in. If there is some way that the government can enforce a plan to stabilize the energy prices.
Can anyone remember a time when their car payments were higher than the cost to operate it? I can. This past summer I was paying over $1000 per month to drive my Yukon. I traded it in on a Jetta.
What have you done to get by and what are your thoughts on what should be done?