patrick.net

DinOR

BMW even sources manufacturing from the US; for their X class SUVs. I think they have plants in places like South Africa, and a number of supply chain suppliers are located across eastern Europe and form Soviet republics with long names and no vowels.

@HARM

I'm sure you know those links on oil are for crude. I don't know about you, but I've never bought any crude. Not even "light sweet" crude. I buy gasoline.

Gasoline has its own whole market, which is strongly tied to crude but not 1:1 so. A good deal of short term price action in domestic gasoline is based on refinery capacity.

If I want to be cantankerous for a moment, one might say that the Europeans and other high-gas-tax regimes are in more trouble than we. For us, if prices of oil rise as an input to gasoline, we can allow prices to rise without risking losing tax revenue base. In Europe they face the prospect of losing lots of taxes if they don't cut taxes in the face of rising oil prices.

Then again, we don't depend upon Iran and Russia for our crude either. I wish the Europeans the best of luck with that strategy.

(repost with edits)

Brand,

I have to disagree about housing and education, those things are overpriced not merely because demand is greater than supply, but due to an unfortunately misperception that education and housing are “sure bets” that are worth any price. This causes people to overestimate the value and pay any price for the good. Properly priced, there are plenty of housing in this country and space for a lot more. There are also lots and lots of Ph.Ds (esp. in the humanities) who are only too happy to teach and do research for $40-60K a year.

These trends are harmful to everyone long term except administrators/tenured professors/student loan officers in education and realtors/builders/mortgagers/current owners intending to sell.

Much of the current high oil price is also tied to Middleeastern instability, though China/India/SUVs&McMansions certainly do their part.

DinOR,

When partying in Scandanavia, bring your own alcohol or load up on DF booze.

(Ditto healthcare...I think much of what is wrong in the US is caused by the fact that everybody acts as though there is no such thing as scarcity and cost is something to consider between taking a $70K HELOC for a new Corvette or $120K HELOC for a new Carrera.)

Good grief! Secondary and tertiary effects of a weakening dollar!

Well, look for the Chinese to buy Rockerfeller Center and Disneyland in 2012...and the Chinese tourists...the very very gauche Chinese tourists...

All of our cheap Made in China products - i.e. clothes, electronics,and furniture will get more expensive with a weaker dollar.

Buy now.

"load up on DF booze"

Uh.. that's a given.

BMW also makes their sportscars in South Carolina, not just their SUV.
www.bmwusfactory.com

However, Mazda still makes the Miata in Hiroshima, which may account for their glowing reviews.

A guy I used to work with pulled $75K out on a HELOC for a fancy pants Mercedes sportscar three years ago. I wonder how he feels now that his cheapo condo in Sunnyvale isn't worth what he had hoped it would be by now.

That guy made fun of me for buying a lowly Miata (for cash). I think the boot's on the other leg now as they say in Limeyland. He's probably underwater with mortgages and the HELOC. I simply sold my place in Cambrian Park and used to proceeds to retire upon. He's still a wage slave.

New thread: Bakersfield Californian eliminates 12.5% of staff due to 'decline in real estate advertising revenue'

@RandyH -
the problem with the 'exporting inflation to China' theory is that they export it back by buying truckloads of low interest debt.

@DennisN -
I wasn't aware that the Z4 was US-made. I thought it was only the SUV's. I recently drove a friend's new '07 Miata, really sweet car. I just wish they would get a little more adventurous with the styling, or have a differently skinned version. I would totally buy a Japanese-built Miata that looked like the Alfa 8C...

SP

@SP

No they don't export it back. It is unrealized because they keep increasing their foreign denominated debt holdings. If anything they are exporting deflation (or rather containing price inflation).

Because they send cheap crap here workers can buy stuff with lower wages. That takes off wage inflation pressures and is visible in the stagnant or decreasing wages of all but the top 2-classes of US worker. If they were sending inflation back to us then wages would have to inflate and/or people's purchasing power would have to go down.

Someone will eat the inflation eventually. My money is that it mostly won't be us. There is a chance that China just burns it off slowly over many decades, using it as a lever to control their expansion in the form of real rates-brakes.

Astrid and HeadSet,

I'd agree that it is an age old tradition to BYOB when heading for Scandinavia,
or in more rural areas, perhaps have connections with a local "entrepeneur".

As for beer prices, I'd think you could get a pint for about $8-9, but in a hotel
bar it might be the $14 that HeadSet experienced in '93. I think competition has increased since then. Generally speaking, don't be surprised if consumables are about 2X US prices for comparable items, but it can be less as well if you shop around a little.