Chiriquí Chatter

Jan 3rd, 2008 by Don Ray

As you can see, the price for gasoline and Diesel went up. Gasoline and Diesel are being priced very much the same here in David.

Tags: Gas Prices

Posted in Panama Journal

8 Responses to “David Gas Prices - January 2, 2008”

on 03 Jan 2008 at 10:27 am1Charlotte

In keeping track of the market, crude prices reached $l00/barrel yesterday. Looks like it is holding pretty steady within a few bucks. I really think some of our politicians in the US should have more street smarts rather than a political agenda. They insist cost of living is steady but they don’t have to buy anything on their own - it is given to them as “perks” - but the people in Panama and the US suffer their inadequacies and have to pay for their lifestyles. I feel that, eventually, the Panamanians will suffer consequences of what is happening in the US and the reflection it has to this Country. We feel it already as we tried to escape the multitude of price increases in the US and it is hitting us here………..
on 03 Jan 2008 at 10:34 am2Don Ray

Still the price of gas in the US and in Panama is much less than in many of the European countries.
on 04 Jan 2008 at 10:30 am3KK

Charlotte,
Currency devaluation = inflation.
Go to http://www.quote.com to see the USDollar’s performance against the likes of the Euro & Pound etc..
USDollars (ie: “Petro Dollars”) are falling into disfavour with an increasing number of oil producing nations. As the buck dives, oil prices must inexorably rise.
Sudan, for example, is an oil producing state (suprised?) and recently shunned the USDollar for the Euro. The USDollar has been under severe pressure for the past 6+ years and the relentless pressure is continuing. Consider that Bush, in the past 1-2 months has signed over a trillion (with a “”T”"!) in spending, mostly for military engagements. The real estate bust is infecting bond markets with toxic debt. Not good for Uncle Buck (aka the USDollar).
Total USDebt is figured to be approximately 48Trillion dollars by some! Severe devaluation is the only way to ‘pay back’ these debts.
Consider yourself informed. The dollar chart doesn’t lie.
PS. The Canadian dollar seems to have bottomed/stabilized. Check with Scotia Bank….
KK
on 04 Jan 2008 at 11:50 am4Don Ray

KK - I have reached my limit on your negative US attitude. Take it to a board where it is desired.

Consider yourself informed.
on 04 Jan 2008 at 8:56 pm5KK

Don,
I was responding to Charlotte, who makes a few valid points. My response clarifies the reasons behind her findings. We are discussing finance/economics in this thread. I believe my post deals strictly with those topics.
I feel my response to Charlotte stands on it’s own merits in terms of relevancy & factuality. We are talking about money. I do consider myself ’somewhat’ informed.
People need to know what is happening in the financial world since many are on fixed incomes and/or holding various investment
vehicles which are & will continue to be affected by the forces pointed out in this thread.
Rising fuel/food prices hurt most people as Charlotte points out. Inflation is an equal opportunity destroyer of wealth. Charlotte also indicates she left the US in hopes of avoiding rising prices and she’s now finding that higher costs have followed her to Panama.
Is Charlotte anti-American for moving to Panama? I think not.

If you decide to censor/ban me, that’s ok. Leave this thread here and let the people read & understand these dynamics for themselves. There are bound to be at least a few readers here who will thank You for doing so.
on 04 Jan 2008 at 9:51 pm6Don Ray

There is no question that the US needs to get its act together on many fronts. However, I believe that many of the raising costs in Panama have nothing to do with the US government. When it comes to gas prices, as I said, the US and Panama still pay much less for fuel than many areas of the world.

The real way to control fuel costs is to reduce dependency on foreign oil.

But to get to the real cost inflater in Panama, some of the blame can be placed on US gringos moving to Panama and paying more for goods and services than a typical Panamanian would pay. Therefore the price of land goes up and once it goes up, it will go up for everyone, both Panamanians and others moving to Panama.

Want to talk about inflation? When I moved here, you could buy prime land in the Boquete area from $3 to a maximum of $10 a meter. Now that same land will cost $10 to $50 or more a meter. Land that Panamanians used to have a dream of buying, a little at a time, is no longer a dream.

If I look at all price increases that have occurred in Panama in the 5 years I have been here, the most significant inflation has been caused by unthinking people that have moved here and bought property overnight without any concept of whether they were paying wisely or not.

Then after paying more than they should for the land, they pay more than is reasonable for the services to build a house on it, or create a farm, or buy a tractor, etc. etc.

I can’t fault the Panamanians for recognizing an easy way to make more money by removing it from the pocket of a wealthy gringo who doesn’t want to take the time to find out what the correct amount is he should be paying. This, then pushes much of the labor market toward building and supporting the building of the multi-million dollar land developments. This has a negative effect on the Panamanian because he will have to pay more for labor, because the limited resource has been gobbled up by the developers. If the developer has to pay more, he will just pass it on the the next gringo to buy one of his offerings. It becomes a vicious circle.

I had young man come in to bid on putting new Formica in my kitchen. He said it would cost $180. Now in the US, that might not have been all that bad. I thought it was high. He said, all right, he would drop it down to $150.

I called a Colombian friend of mine, that is in the building business, and asked for help. He brought over a worker he knew. The worker looked at the job and said he would do it for $25. Now that is inflation and it has nothing to do with the US.
on 05 Jan 2008 at 11:25 am7KK

Don,
That the Balboa is directly pegged to the USDollar. There is what people must understand..
Therefore, the forces upon the USDollar are applied directly on the Balboa. If a dollar buys 10% less gasoline, for example, so it is with the Balboa. It’s all a blizzard of confetti (”faith based” paper money) whirling all around the globe and everyone is affected. However, although gas prices in Europe have been higher forever, it’s more a function of very heavy taxation & North Sea draw down, as we know & maybe 1 or 2 other factors, a protection racket, so to speak. Recently, gas prices in Europe have held steady when you adjust for currency exchange (USD/Euro). The Euro has been rising for 7 or 8 years, the dollar falling. Oil traders had had no choice until recently but to convert their currency to USDollars to complete transactions. This is changing. Producers want payment in more stable currencies. All I am saying is that this is reducing the demand for dollars. What is weakening is called the ‘velocity of money’ and has been important in maintaining the strength of the USDollar.
For example…
Talk to a few Europeans who are spending money down here..building houses etc.. They are yukking it up big time with the strength of the Euro, knocking on $1.48 again this week. Stuff seems cheap to them..Land priced at $100K suddenly costs e70K, a real bargain! Although “official” inflation stats are skewed to ’stick it to’ those receiving gov’t pensions in the US, we ALL know better. USInflation is running at about 8-10% according to real experts sans axes to grind.
So, the individual can shop around for labor but materials (commodity items) are priced competitively pretty much everywhere you go (& going up, for now..but, will demand fall with economic weakening? Are popular small countries somewhat immune with heavy influxes of people & investment?). Take land for example. There really ain’t too much of it down here and people with $$ will pay what they believe to be ‘bargain’ prices compared to say… Miami or NY.
Will this change? Will tightening credit put the hammer down on reckless spending? Is there enough cold hard cash around to sustain growth without borrowed money? Will this ‘cash’ retain it’s value? Even the European Central Bank flooded their system with half a Trillion dollars (US equivalent) about 2 weeks ago. This should prove to be, at the very least, a very interesting year and hopefully not too many lessons will be taught all at once.
I do hope people understand what is going on. Stay aware. Educate yourselves. Take measures to protect yourselves. Perhaps buy commodity items, good farmland for one..put a few cows on it or stock up on cigarettes and stuff like that. There’ll always be some value there!
on 18 May 2008 at 9:04 am8lloyd

Looks like moving more $ to Panama is still the good idea . Perhaps even a bit of finca