The Obama Administration’s Dollar Devaluation lowers the Cost of Living in Britain

Posted by PITHOCRATES - October 6th, 2013

Week in Review

The British economy appears to be turning the corner.  Of course, they have an advantage over the American economy.  They’re not stuck buying petrol with a devalued American dollar (see UK economy growing at fastest rate in the developed world by Philip Aldrick, and Steve Hawkes posted 10/3/2013 on The Telegraph).

And there were hopes tonight that the signs of life could help tackle the cost of living, with a strong pound helping to push down the cost of petrol, which is traded globally in US dollars.

There are two primary forces that determine the price of gasoline.  Supply and demand.  And the strength of the US dollar.

Thanks to the worst economic recovery since that following the Great Depression, gasoline is not in as great of demand as it once was.  Before President Obama became president.  With so many people having left the labor force people just don’t have the money to put into their gas tanks.  Hence the ‘staycation’.  Spending the family vacation at home.  Doing fun things in the backyard.  Like cutting the grass.  And then when the kids’ chores are done there’s hotdogs on the grill.  Can a week at Disneyland compare to that?

Even though we’re buying less gas gasoline prices are still pretty high.  Why?  Because unlike the British we buy our gasoline with devalued dollars.  Due to all of that quantitative easing.  Printing money to buy treasury bonds.  To stimulate the economy.  Where only the rich Wall Street traders who buy and sell these bonds are getting stimulated.

With more money in circulation chasing the same goods and services in the economy it takes more dollars to buy what they once did.  Including gasoline.  Especially gasoline.  For the higher price of gas can be hidden in other products by reducing the package size of the product sold.  Such as smaller cereal boxes.  The prices may not be going up on cereal but we have to buy cereal more often.  Spending more money in the long run.  The higher price of gasoline (due to a weaker dollar) makes everything more expensive in the supply chain that ultimately puts those boxes of cereal on the supermarket shelf.  Ditto for everything else that is moved with gasoline or diesel.  But they can’t shrink the package size of gasoline to hide the added cost from the devalued dollar.  Because they sell gasoline by a fixed measurement.  We buy it by the gallon.  We don’t buy it by the box.  If we sold cereal by a fixed measurement we’d see cereal prices rising a lot higher than they are now.  But they’re not. So the boxes are getting smaller.

The British pound is stronger than the US dollar.  So when the British buy oil on the world market they exchange stronger pounds for weaker dollars.  Getting more dollars in exchange for their pounds.  Removing the U.S. price inflation (due to the devalued dollar) from the price of oil.  Lowering the cost of oil in Britain.  And lowering costs throughout the British supply chain.  Which will help lower the British cost of living.  Making life easier for the British consumer.  Because the British are more responsible with their currency than the Obama administration is with the American currency.


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Car Company misleads People with their Deceptive Electric Car Ads

Posted by PITHOCRATES - August 25th, 2012

Week in Review

How do you sell an electric car?  You avoid telling too much of the truth (see Banned, electric car ad that was miles from reality: Vauxhall commercial forgot to mention model’s petrol engine by Sean Poulter posted 8/21/2012 on the Daily Mail).

For carbon-conscious drivers, the advert for an electric car with an impressive 360-mile range seemed too good to be true.

Unfortunately, it appears it was, as the real range of the electric batteries in the Vauxhall Ampera is a rather more modest 50 miles.

And to go beyond that, it relies on help from a somewhat less green source – a petrol engine…

Vauxhall insisted its claims about the Ampera were genuine and that once in ‘range extender mode’, it can indeed keep going for 360 miles…

The advert for the car – which costs just under £30,000, including a £5,000 Government grant – briefly showed the vehicle plugged into an electricity source…

Vauxhall insisted the Ampera is a truly electric car because the petrol engine does not drive the wheels, but acts as an on-board generator for the electric motor.

The US company also argued that the 360-mile claim was conservative and significantly understated the range achieved in vehicle tests in order to allow for ‘real world’ driving styles.

So the US company used a £5,000 (approximately $7,910 US) Government grant to advertise this car.  Something systemic in the electric car industry.  Government subsidies.  For they just won’t work without them.

Glossing over that petrol (i.e., gasoline) engine is pretty significant.  Because probably the biggest thing holding back all-electric car sales is range anxiety.  Will a driver be able to make it home before their battery runs out of charge?  Which is really not an issue for someone with a 20 minute roundtrip commute.  But a huge issue for someone who drives 25 minutes or more one way.  For once you arrive at your destination you have to find a receptacle to plug in your car.  And you probably won’t be able to go anywhere for lunch.  Unless you have a friend with a gasoline-powered car.  So imagine a person’s surprise if they bought what they thought was an all-electric car and marveled at their 360-mile range.  Never noticing the gasoline engine coming on.  And never buying gasoline.  Until their car coasts to a stop somewhere.  Away from home.  With no lights, radio or heat.  And probably in a unfamiliar neighborhood.

Unless you strip a car down to nothing but batteries you’re not going to get much more than a 50 mile range.  At least for now.  Because that’s about all current battery technology will get you.  Which is why no one is taking these all-electric cars on the family vacation.  Or to work.  The carbon-conscious will at best drive a gasoline-electric hybrid.  And drive most of their miles on gasoline.  But they will still have that smug look of satisfaction on their face because they know they are saving the planet by driving a hybrid.  Even though they may be burning just as much gas as they once did.  Unless they drive in the dark.  With no heat in the winter.  Or air conditioner in the summer.

Why was this car company not exactly being forthright in their ad?  Because they want to sell their cars.  In a market where so few people want to buy what they’re selling.  So they embellish the truth in advertising a wee little bit.  But it sure makes one wonder what they tell these people when they’re in their showroom.  Because it is really hard to believe that someone would actually buy a hybrid thinking it was an all-electric car.  I mean, these people are probably going to look under the hood.  And they may even ask if the car is an all-electric car.  Like that ad led them to believe.  What then?

Could there be another reason?  One that hasn’t anything to do with people buying their cars?  Could this just have been a way to help obtain further government subsidies?  By pointing out great advances they’re making in their battery technology.  As well as showing how much more was possible with just a little more government funding.  Perhaps.  It sure seems more plausible than lying to customers.  Who are generally smart.  As opposed to government bureaucrats.


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