Well, the inevitable has happened. The gas companies are starting to raise prices, presumably in preparation for fuel shortages from Hurricane
Rita’s impending strike on the Gulf Coast. Truthfully, I expected it to happen yesterday as the dire predictions for Rita spread quickly.
Oil prices went up in a big way on Monday, but they’d eased some yesterday, so I don’t quite get this pre-emptive escalation of the gas price at the pump. I’m sure it’s “just in case.” Just in case of what is still a question with me!
Precious metals are also reacting, with gold up about 8% over the last week, and silver up about 5%. It’s crazy folks, just plain crazy.
And then the fed raises interest rates yesterday. That one I also don’t get. I’m not an economist, nor do I play one on TV, but it seems like if you know a bunch of price hikes are happening in the economy (primarily driven by oil/gas prices), and that you have a huge amount of deficit spending already underway (Iraq, Katrina) with more on the way (Iraq, Katrina), you probably don’t start trying to tweak the financial model until you understand the effect of the unprecedented things already in motion and the ripples from them.
No matter, this week will be an interesting one to watch as Rita starts her spin toward the coast.