Basically, We're Screwed

So I wonder what kind of derisive nickname the Canadians are going to come up with for our currency? The dollar is going to keep going down and down and down. This is where our vulnerability to the Chinese and other significant foreign dollar holders really shows up. If they decide to bail on dollars, they will likely do so by buying up assets payable in dollars. Like remember when the Japanese bought Rock Center and everyone freaked out? Yeah, like that. Clusterf**k Nation has a pretty good explanation of this whole phenomenon going on, so I will just link you over there if you’d like to read up on it. Speaking of Clusterf**k, I spent some time reading that site yesterday afternoon. It was like reading my own mind. He’s pretty spot on with a lot of topics (at least I think so) like oil’s coming effect on planning and zoning, the dollar weakness issues, the Fed being idiots by dancing to Wall Street’s tune. Good stuff.

By the way, oil will break $100/barrel this month. Definitely. Could happen soon, maybe within a week. Gold prices are at records – foretold on this site here, here and here.

So all of this oil price stuff got me thinking about what we’re going to do about $4/gallon gas. A little exercise I did a while ago played various gas price scenarios against housing price scenarios. My methods were simple – take a home price, “X,” and compare it fully valued for living in the city to various likely discounts as you get further from the city.

Then take mileage to drive to the city from each increment of distance, and multiply by various gallon prices of gas at a constant mileage value (I used 15 mpg – a lot of pickups/SUVs). My data for housing wasn’t that great, but I guessed that a house with a 45 mile commute would be at a roughly 60% discount to one with a 2 mile commute, and that the discount would increase at a lower rate than distance. Based on comparing houses in, say, the Palisades and Front Royal, this is generous to the house in Front Royal. Based on this simple data, it’s easy to see why people commute. It costs way more to live in the close in suburbs, even with gas at $5/gallon in a 15 mpg car.

Take the current housing market, in which the premium for close in suburbs is rising pretty fast relative to more exurban areas, and you strengthen the “use a lot of gas” option. So people are being economically motivated to drive long distances and use a lot of gas just at a point where we, as a whole, can least afford to have people using a lot of gas.

For my own personal account, we made this decision a couple of years ago because it was really fun and also because it gets great mileage.

Taking that even further, I think I’m going to start bike commuting again. I did it for a while last year and it was kind of a pain in the ass but not too bad. It’s around 15 miles each way to the current site, so it takes about 50 minutes plus the extra time to get out the door and change once I get in. Also, I don’t really want to ride my good bike because I don’t want to beat it up, and I don’t want to ride the mountain bike because it’s heavy and slower. There is a third option: the Frankenbike commuter model. I have nearly all the parts to turn my old road frame into a sweet, 8 speed, flat bar commuter. Missing pieces include the flat bar, a saddle and brakes. I can scrounge those together for nothing. I’d probably even go the extra mile and get a second Powertap wiring harness so I can download all of my commuting “training” into the (yet to be identified or used) software.

Speaking of software, there is a shareware program called Golden Cheetah. Anyone used it yet?