So here I am, sidelined by a miserable summer flu that still has a strong grip on me even at the end of week two. My head is so foggy that I’m reduced to watching TV’s inane summer programming, the Mike Duffy trial, election promises, and talking heads explaining our current economy.
With this in mind, I give you some random musing from a cranky old lady.
The price of gas
As I write this, the price of a barrel of oil is $39.63 a level not seen since 2004. At that time I lived in Calgary (admittedly one place where the price of gas was lower than other areas) and gas prices hovered around the 75-cent mark. In fact, it didn’t top $1 until 2008 when the barrel was about $142. However, the current price of gas in my area is $1.269. What gives?
Here are the reasons given:
1. The barrel is priced in US$
2. Federal and provincial taxes at the pump
3. The cost of refining and transportation
4. There is no correlation between the price of the barrel and the price at the pump.
Here’s my rebuttal:
1. Except for a recent approximately 5 year (heady) period of our dollar being on par – or close to it – with the US $, we have had a lower Canadian dollar since 1976. I think we should be used to that by now.
2. As far as I know, the percentage of government taxes on gas has not increased substantially lately.
3. I realize that crude oil has to be refined and transported to the service stations for our consumption, but that’s a pretty hefty increase – more than any other industry.
4. Come on!
In my opinion, someone is reaping the big bucks here, and it’s not investors.
The rising cost of food
With forest fires threatening our orchards and vineyards, and a growing drought in Alberta cattle country, it seems my weekend barbeques are destined to become just a memory.
Related: The real cost of living
Grocery prices have soared in the past year or so. Depending on the source, beef has increased by 11- 23%, fish by 14%, and produce by 5 – 7%.
Again, blame for the spike in grocery bills fall on the lower loonie. Despite being surrounded by seasonal, local food, most items on our grocery shelves come from outside the country or are purchased in US$.
According to a recent Ipsos Reid poll, 40% of Canadians are concerned about the rising cost of food. Yet, the campaigning politicians blather on about increasing/decreasing TFSA contributions and instituting further tax credits.
I feel badly for those who are on a low, fixed income, or have a large family to feed. It’s not easy to eat healthily for a reasonable amount.
Stock market drop
The financial media was screaming in panic. China’s stock market crash and cut in interest rates signal a red flag for investors.
The markets were reeling with the biggest one-day percentage drop – and biggest sell-off – since 2011.
The VIX Index, which tracks the prices of options on the S&P500, surged to a level that shows investors are getting scared. (The VIX is often called the Fear Index.)
What do you make of this?
Strong markets do a correction on an almost yearly basis. This tells me that growth may be slowing but is still robust, or at least stabilizing. Recent reports from BMO, CIBC and TD show enough growth to top their forecasts for profits.
If you’ve chosen an investment plan that works for you, just stick with it and ignore the panic-inducing headlines.
Well, that’s enough thinking for now. I’m off to have a nap.