It seems that the economy is the number one topic of discussion these days. Most people are blaming it for all of their financial problems. The news is full of stories about the negative effects of the terrible economy such as foreclosures and layoffs.
Maybe we are just die hard are optimists, but I noticed that my previous post entitled Falling Prices are the Bright Side of a Bad Economy was quite popular. So here are more reasons why the bad economy is actually good for us.
One reason that I touched upon in the previous post is the falling price of oil and gasoline. Not only does it make life easy for us at the pump, but it has a cascading effect throughout the economy. Most of the things that we consume are physical, and therefore require energy to be delivered to us. When oil prices are high, it costs more money to ship everything. And these cost increases can be seen in every physical product that we consume. It includes drinks, food, books, computers, and even cars. The good news is that as the cost of crude oil falls, the price of most of the other items in the economy falls as well.
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Business Strategy, Money, US Economy
crude oil, customer service, depression, economy, energy, finances, foreclosure, gasoline, layoffs, recession
The media is great at spreading every negative piece of news. And the economic turmoil that is happening today throughout the world is no exception. Is it possible that there is actually something good about an economy that’s going down?
A year ago, the top news story nearly every single day was the high prices of gasoline and crude oil. The media portrayal of gasoline was actually the subject of one of my posts. The news on television showed people complaining about spending $100 to fill up their SUV. Gasoline was at $4 a gallon, and the media took the opportunity to talk about it on a daily basis. Average people were portrayed as victims of the greedy oil companies.
As we all know, the price of crude oil and gasoline has collapsed since then. Gasoline is down nearly 50%, and crude oil is down even more. The price of oil is linked to the overall economy. As the economy continues to go down, people consume less gasoline, and businesses need less oil. That causes the price of those two commodities to go down.
So, surprisingly, there is actually some good news for consumers in the down economy. I don’t know if people are happy about buying gas for a less than $2 a gallon, but I sure am. And, oil has an effect on all prices throughout the economy. We can expect that prices will fall for pretty much everything in the near future.
This is the fourth post of a series about how the down economy is good for your finances. The previous post is Tough Times are an Opportunity to Get Better at Managing Money. The next post is A Wake-Up Call for Personal Finances.
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Money, US Economy
crude oil, depression, economy, falling prices, gasoline, recession
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
