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Saturday, April 22, 2006

Gasoline Induced Recession?

It's out all over the net that the prices at the pump are hitting people pretty hard in the wallet. From my own families perspective it's obvious that cutting back on non-essentials is what we have to do. The money for the gas tank that gets us back and forth to work has to come from somewhere? It starts with the grocery bill and instead of the name brand products you buy the store brand. Instead of beef we get chicken or pork or at the least the cheapest cut of beef there is. No more bakery birthday cakes, boxed mix will have to do. The list goes on.

We are just one family. What is the multiplied effects of this same behavior across the nation? Could this change in purchasing have a vast enough impact that it could kick in a recession? I think it will and it won't take long for it to begin.

I saw on MSNBC that even the big retailers are cutting back and changing their business strategies and targeting consumers higher on the old food chain. Rightfully, so. Lower income families are not going to be purchasing products that they can technically do without. Some of the airlines are cutting back and scrapping inefficient planes. Cutbacks and more cutbacks. Eventually, it will trickle down to layoffs by the thousands.

What happens next? Besides giving the retiring executive of one of the worlds largest oil companies a $400 million dollar exit bonus we wait and see. Gasoline prices are still going up and we bite the bullet, that morning coffee and doughnut a day habit will have to change.

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