Monday, January 31, 2011

If Gas Prices Go to $5 Per Gallon

(This post was written with Egypt's current political atmosphere in mind.)

Photo Courtesy of the Associated Press.

The Alpha Strategy gives simple advice on how to protect your wallet against inflation. Download it here.

But if you haven't downloaded that book yet (or haven't read it) I will briefly mention what you can do to prepare for an increase in gas prices.

Unfortunately, there is very little, especially if the price of gas jumps overnight. This is because gas is unlike other things you can buy in advance (like food) before the price goes up. Simply put, you can store a lot of food in a pantry. You can't store a lot of gas anywhere unless you have a storage unit away from the house. This rules out people who live in apartments and condos. Only homeowners can do this.

Option 1:
Stocking up on gas is the best you can do. It is also the hardest to do. And it also the most dangerous. There are a lot of drawbacks to this. There are a lot of Federal rules and permits that you need to do this. Most people won't or can't do this. I can't. Perhaps the rich can or someone with tons of free storage room. Turn to page 78 of the Alpha Strategy to read about this in detail.

Option 2: Buying a motorcycle or scooter (like Vespa) can help reduce travel costs. Certain scooters have 2.5 gallon tanks that travel 70 miles per gallon. They are also very stylish. I would get one. I think they are pretty stylish. The upside to getting one of these is that even if gas goes to $5 per gallon, you're only paying $12.50 for a fill. Whereas your SUV-driving counterparts would be paying $70 dollars easy. The downside is that the fastest ones only go about 50-mph, which make it good for city streets, but bad for highways. Then again, if less people are driving, highways will be less crowded. Oh, and of course, it is only a one-seat deal. Sorry kids.

Additionally, if the price of scooters or motorcycles increases, you can buy either one early and lock in a good rate. So even if there is interest, say on a $1,999 scooter, it is still less than interest on a $3,999 or $9,999 or $19,999 if the price doubles, triples, or whatever due to inflation.

Motorcycles are also a way to hedge against inflation. Read about this here ("A Two-Wheeled Hedge Against Inflation).

For a list of the MPG for motorcycles visit the following links

Top 50 Best MPG Motocycles

Total Motorcycle Fuel Economy Guide

For a list of the MPG for Scooters visit the following links
MPG Guide: The Fuel Economy Of 250 Top Selling Scooters
Motor Scooter Muse

For Vespa, the international scooter company, go here.
For Honda click here. (Youtube is handy to see how they ride)

Option 3: This option is a continuation of the second. You can store gas cans for motor cycles and scooters in a garage. Perhaps buying a few cans in advance wouldn't hurt. Oh and the Alpha Strategy mentions that chemicals in gas break down over time, so read up on that before you store anything. Then consult a professional.

Option 4: Buy a bike...better than the one you had in middle school. It is the last also signifies a lower quality of living. No one wants to resort to this. I don't want to do this. I like the motorcycle option the most.

Once again, if you haven't done so before, download The Alpha Strategy and flip to page 78.

On a side note, I believe that more people will buy motorcycles and scooters as market pressures force gas prices to rise. I'm not saying the following scenario is realistic, but imagine if we let GM and Chrysler to fail, and a foreign company came in and re-figured their factories to sell something Americans, and perhaps the world, needs.

The Chinese rode bikes a lot before they became an economic power. I'm sure Americans can ride gasoline-powered motorcycles, especially if a squeeze on their wallets force them to.

Now that I think about it, the small tanks that they hold are very conservative of gas. Perhaps a shift in more people using these would be an example of how the free-market conserves gas, instead of a legislation used to shift everyone to "green energy."

On another note, I think if the prices increases dramatically, more companies will shift to telecommuting.

No comments:

Post a Comment

WCF Chapter One "Of Holy Scripture" Sunday School (Sept.-Oct. 2021)

Our text for Sunday School (also "The Confession of Faith and Catechisms") Biblical Theology Bites What is "Biblical Theology...