RE:The Three Factors to Focus on When Analyzing GamehostTravelling at high speeds increases friction and decreases fuel economy. Some cars it's 80km/h, others may be 100km/h but there is a point where additional speed results in quickly deteriorating fuel economy.
I view $110+ oil and $6+ natural gas as the consumer travelling at high speeds; the higher those commodity prices go, the more pressure on most Canadian consumers. There is a price point that hurts the masses. A cold winter with little food and a hot summer with dwindling natural gas inventories will start to trigger front-page news. Fear of going without. Consumers will stop spending and we get a recession.
Inflation has arrived in the form of higher debt costs, higher food and fuel costs, astronomical cost of housing in many parts of Canada.
Some inflation is good, as TLV points out, I just worry that the world is running too hot at this point in time and we gotta let off the gas a little or face a quickly depleting gas tank, aka, discretionary spending.
We were talking about it the other day. $20 for a pound of chicken wings. People will be dining out once a month rather than once a week. Same goes for entertainment spending.
Alberta better positioned to survive inflationary flare ups but I still am keeping my expectations for consumer spending tempered.
Even JR Georgie has noted his sardine costs are up 50-100% across the board. He's worried about Diesel shortages and eventual Natural Gas price spikes as inventories get bare.
Energy and fuel costs have that 3-bears scenario where we can view things as being too hot, too cold and just right.
$60 oil is too cold
$120 oil is too hot
$80 oil is just right
Gonna take a recession and peace in Eastern Europe to get us back to the "just right" zone