From: ThosStew@aol.com
Date: Wed Jan 24 2001 - 06:00:19 PST
In a message dated 1/24/01 7:21:04 AM, ejw@cse.ucsc.edu writes:
>Anything wrong with this logic?
the electricity price jump in California is the boaming crest on a wave--you
wil lrecall that oil prices were about $10 a bnarrel just 2 years ago, and
then spiked up to about $30 a barrel. We also have OPEC playing games again
and Chavez in Venezuela giving big parties for the people, a kine of
petrochemical peronism.
When energy prices go up, yes, the cost of doing business goes up, until
people learn to conserve and bring supply and demand back into sync. We
(Americans) with our very very cheap energy relative to the rest of the
world, get a lot of economic steam, as it were, out of that cheapness; but we
get rigor and productivity improvement when we get high prices as we have
now,.
Yes, the high cost of energy in Calfiornia wil ldivert spending to
electricity from toehr uses, like food, clothing, shelter, capital goods, and
WAP telephones. Yes, like high interest rates, high energy rates slow things
down.
Yes, we're in for a slowdown.
No, it won't be long--it might not even be two quarters of negative
growth--nor will it be deep, though it will be bumpy--the market seems
already to be signalling to that effect.
Tom
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