Posts Tagged ‘Detroit’

Gas Prices May Reach $5.00 per Gallon Sooner than We Think

In economy, marketing, mindset 3.0 on May 22, 2008 at 7:57 pm

The high cost of gas is likely to be a topic of discussion unless you ride a bike, been living in the “Enchanted Forest” or you earn over $1 million dollars per year. So, it’s safe to assume, this post is relevant to 95% of the people who may stumble across this blog. Because of the gas prices, I am looking for a new car or rather a more fuel efficient automobile. During my research, I came across the list you see below. If you live in Detroit, there should be good reason to worry.

And if you trade stocks, sell the US auto stocks short. This list is useful if you want to begin the search for a way to save gas. I didn’t stop there, I went a bit further and polled a few people on how much it costs to operate their automobile for a month.

You ready? People are paying between $550 and $800 per month for gas. So, assuming the average American car payment is $400 per month, the total cost is between $950 and $1,200 per month. Let’s take this a step further, what if you are married and have TWO car payments? You would approach $2,400 per month for the privilege of paying yourself to drive to work, sit in traffic and listen to the radio. If the Detroit automakers were playing Texas Hold’em Poker, and the Japanese said, “all-in” and Detroit “called”, they (Detroit automakers) would be wiped out.  Can you say: “government bail-out” again.

On the serious side of this discussion, is we are close to this scenario now. Just imagine the ripple effect? Nobody will purchase large SUVs and trucks. Thousand of Jobs will be lost. Bankruptcy for both GM and Ford. Government bail-out. And now gas is $6.00 per gallon and the special interest groups continue to lobby against more fuel efficient automobiles and commerce slows to a crawl. Can you say “Depression“?