Sticky Up There, Uncle
Back more than one year ago, any new post written right about this hour on a weekend was possibly a not-so-sobre one. I'm domesticated not because I'm affected by the economy, but by my own age.
My topic this time relates to a phenomenon that I had (unfortunate enough) to witness, however.
In July, oil price peaked at $147. Technically speaking (you can skip this) that of course refers to price per barrel for futures with delivery the next month from that date quoted.
At time of writing, oil price has retraced almost two thirds of that level, now standing at less than $50 per barrel. Now those are just statistics. But not merely statistics. They created hoo-hahs everywhere. First with the government cutting its subsidies on oil, then a flurry of cost and price issues hurting us, the consumers, hard. Here is my experience.
I once frequented this uncle's stall for lunch almost every weekday. He had the stuff I wanted and his prices were reasonable. My diet was still strict (relatively) then, which made me not only sticking to a regime, but to a provider that consistently had what I needed.
On one occasion, prior to announcing the price he was gonna charge me for my lunchbox, he said, hey look, it's gonna be expensive this time around. I said alright. He charged me 8 bucks, but returned 3 bucks as change when I handed him 10.
Subsequent lunches were fine. Reasonably fine.
Then came this second time that he disclaimed the hike in price again prior to accepting my note. I smiled and accepted that, for I should at least try to emphatise his position a little. But why should I? This time around, he thought he had to justify the hike. He told me the story of prices of poultry rising. Fine. But when I heard him saying that he would cut back his prices when prices of poultry come down, that put me straight into doubt. That kinda doubt resembling that beep in the radar when you detect bullshit.
After raising prices, who would really cut them?
Well my point is, prices are sticky downward. Or sticky up there. Bus operators now even demand a raise in fare despite the worsening oil position.
My solution? I just hope I'd be one of those successful speculators that would earn more than enough to survive should there be another rally/plunge of any sort in the market. Be it commodities, forex, etc. Because speculation is what it was all about. Fuck the China-India fundamental explanations. Look what the naivety has brought upon us.
posted by Ben at 4:38 AM
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