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The whole article is based on false pretense that fuel prices are highest in the known history. The fuel price have been stagnant for the past 60 years. If you

The whole article is based on false pretense that fuel prices are highest in the known history. The fuel price have been stagnant for the past 60 years. If you use real money, i.e. gold or silver. Fuel prices, food prices, healthcare cost, etc. are all flat line price chart as long as you use real money. Once you use ever-dropping and hugely inflated USD or EUR, all prices seem to rise. Seem is very important here because in fact they don't rise at all. What happens is that the measure we use - USD - is collapsing in value. It's like saying cars are faster and faster, but every year lowering value of meters in 1 km. I.e. this year 1 km is equal to 1,000 meters, next year it will be equal to 980 meters, and yet next year it will be 950 meters, so on. So in 2024, 1 km can be as little as 760 meters. A lot of economic news or developments don't make sense unless you understand that we have lived in permanent inflationary times for the past 50 years.

grecy 12y ago
If the article was written with your perspective, the airlines would still save a lot of real money if they could find inventive ways to reduce weight, and therefore burn less fuel, irrelevant of the price of fuel.
sebular 12y ago
I'm sorry, but your claims sound absurd. Do you have an economic background? What data are you basing that on? I'm neither claiming expertise with oil or economics, but some cursory Google searches seem to strongly disagree with what you're claiming. Just taking from Wikipedia: http://en.wikipedia.org/wiki/Price_of_petroleum http://en.wikipedia.org/wiki/Price_of_petroleum Adjusted for inflation, our current oil prices appear to be equivalent to 1860s era prices, which places them at 4 - 5 times higher than they've been for the entire intervening period. Not to mention oil prices being subsidized in the US, your claim that the "true cost" of oil hasn't risen seems totally nuts. Care to elaborate?
a_c_s 12y ago
This isn't true: gold prices have varied wildly relative to the price of the dollar. For example, gold was at $1780/oz as of September 2012, and is now at $1326/oz, a difference of -34%. Prices for goods and services have not fallen 34%. On average the prices for consumer goods have increased by a few percent in dollar terms, so an ounce of gold will buy you less than 34% of what it would have two years ago. Intelligent comparisons of prices are done with inflation-adjusted dollar values rather than gold-adjusted values for a reason.
herge 12y ago
Right, but most of our economy is controlled by the price of labor. How have prices compared to the median wage? How much fuel could an average worker buy in 1960 compared to today?
relix 12y ago
Inflation isn't some magical unknown force. Every comparison of historical value includes inflation adjustment. Of course prices rise over time, of course currency devalues over time. Everyone is aware of that. What is this 'real' money you speak of? You mean the relatively extremely volatile value of Gold and Silver? Did you even check a graph of the inflation-adjusted gold or silver price for the past 30 years? Here, I'll link you: http://www.macrotrends.net/1333/gold-and-silver-prices-100-year-historical-chart http://www.macrotrends.net/1333/gold-and-silver-prices-100-y... So is the 'true' value of gold $400 inflation-adjusted dollars or $1800 inflation-adjusted dollars?
crpatino 12y ago
> The fuel price have been stagnant for the past 60 years. If you use real money, i.e. gold or silver. Since most people would disagree that gold and silver are real money, the burden of proof is on your side. I think an equally compelling explanation for your observations can be built from the premise that gold in particular has been inflating an speculative bubble during the same time frame of 50+ years (or more precisely, that since about the 2nd half of 20 century gold price had been recovering from a previous drop in historic prices, and that a bubble has formed around that pattern and just began to inflate about ~10 years ago). If on the other hand you consider the fact that petrol is a finite resource, and that the challenges to build a flying device powered by either nuclear energy, solar, wind or hydro, it is very likely that tourist class aviation will be in permanent decay from now on. I think the capacity to fly is extremely valuable, so it will be preserved by nation states for as long as possible, mainly for military purposes, but also for the rapid transportation of diplomats and other high ranking officials. And if the technical capacity of flying is preserved in any way, the upper layers of civil society will find a way to buy their ways in as well (bringing back the original meaning of the term "jet set" as a side effect). But, mark my words... the days of regular, scheduled flights for the hoi polloi are numbered.
- tommycli 12y ago
  If we didn't have cheap petrol, we'd use nuclear, solar, wind, or hydro to produce somewhat-less-cheap ethanol. It might be twice as expensive, but most people would still be able to fly.
  - crpatino 12y ago
    Yes, I agree. That's why I believe we are not going to loose the technology to fly (at least within this century), unlike many people in the peak oil scene. However, you have to consider the economic feasibility, not just the technical one. If you follow news about airlines, you will recall that they have gone through a series of hardships, raw times and infighting between different groups of stakeholders (unions vs companies). You can write it off as random incidents, or you can understand it under the lens of increased costs and multiple competitors trying to get each a bigger slice of a shrinking pie. I have seen during my lifetime how conditions for the passengers have deteriorated. I recall as a teenager or a young adult, boarding a plane was a wonderful experience. Now a days, they treat you like cattle, and I am not just talking about the hardships imposed by TSA screenings (though they take a fair share of the blame). If you add two plus two, you will find that this decreased passenger comfort is tied to cost cutting measures. But why to cut costs if you can simply pass those cost to the customer and keep the quality of service up? I do not presume to know the answer, but my intuition tell me that the leadership at airline companies have run the numbers and figured out that there is some sort of inflection point in the demand curve, and an increase in prices would cause a severe drop in usage. Instead, a less bad alternative is to cut cost, punish quality, and face a small decrease in demand, but as long as the margin remains in the black the company can keep operating, and wait for better days. My fear comes mostly for the moment when airlines run out of comforts, and begin cutting cost in critical areas of operations such as plain maintenance. Even a modest number of non-fatal incidents may shift perceptions of safety and make the bottom of the bucket fall from under the demand pool. Now that I think about it, this is a market ripe for disruption.

grecy 12y ago

If the article was written with your perspective, the airlines would still save a lot of real money if they could find inventive ways to reduce weight, and therefore burn less fuel, irrelevant of the price of fuel.

sebular 12y ago

I'm sorry, but your claims sound absurd. Do you have an economic background? What data are you basing that on? I'm neither claiming expertise with oil or economics, but some cursory Google searches seem to strongly disagree with what you're claiming. Just taking from Wikipedia: http://en.wikipedia.org/wiki/Price_of_petroleum http://en.wikipedia.org/wiki/Price_of_petroleum Adjusted for inflation, our current oil prices appear to be equivalent to 1860s era prices, which places them at 4 - 5 times higher than they've been for the entire intervening period. Not to mention oil prices being subsidized in the US, your claim that the "true cost" of oil hasn't risen seems totally nuts. Care to elaborate?

a_c_s 12y ago

This isn't true: gold prices have varied wildly relative to the price of the dollar. For example, gold was at $1780/oz as of September 2012, and is now at $1326/oz, a difference of -34%. Prices for goods and services have not fallen 34%. On average the prices for consumer goods have increased by a few percent in dollar terms, so an ounce of gold will buy you less than 34% of what it would have two years ago. Intelligent comparisons of prices are done with inflation-adjusted dollar values rather than gold-adjusted values for a reason.

herge 12y ago

Right, but most of our economy is controlled by the price of labor. How have prices compared to the median wage? How much fuel could an average worker buy in 1960 compared to today?

relix 12y ago

Inflation isn't some magical unknown force. Every comparison of historical value includes inflation adjustment. Of course prices rise over time, of course currency devalues over time. Everyone is aware of that. What is this 'real' money you speak of? You mean the relatively extremely volatile value of Gold and Silver? Did you even check a graph of the inflation-adjusted gold or silver price for the past 30 years? Here, I'll link you: http://www.macrotrends.net/1333/gold-and-silver-prices-100-year-historical-chart http://www.macrotrends.net/1333/gold-and-silver-prices-100-y... So is the 'true' value of gold $400 inflation-adjusted dollars or $1800 inflation-adjusted dollars?

crpatino 12y ago

> The fuel price have been stagnant for the past 60 years. If you use real money, i.e. gold or silver. Since most people would disagree that gold and silver are real money, the burden of proof is on your side. I think an equally compelling explanation for your observations can be built from the premise that gold in particular has been inflating an speculative bubble during the same time frame of 50+ years (or more precisely, that since about the 2nd half of 20 century gold price had been recovering from a previous drop in historic prices, and that a bubble has formed around that pattern and just began to inflate about ~10 years ago). If on the other hand you consider the fact that petrol is a finite resource, and that the challenges to build a flying device powered by either nuclear energy, solar, wind or hydro, it is very likely that tourist class aviation will be in permanent decay from now on. I think the capacity to fly is extremely valuable, so it will be preserved by nation states for as long as possible, mainly for military purposes, but also for the rapid transportation of diplomats and other high ranking officials. And if the technical capacity of flying is preserved in any way, the upper layers of civil society will find a way to buy their ways in as well (bringing back the original meaning of the term "jet set" as a side effect). But, mark my words... the days of regular, scheduled flights for the hoi polloi are numbered.

tommycli 12y ago
If we didn't have cheap petrol, we'd use nuclear, solar, wind, or hydro to produce somewhat-less-cheap ethanol. It might be twice as expensive, but most people would still be able to fly.
- crpatino 12y ago
  Yes, I agree. That's why I believe we are not going to loose the technology to fly (at least within this century), unlike many people in the peak oil scene. However, you have to consider the economic feasibility, not just the technical one. If you follow news about airlines, you will recall that they have gone through a series of hardships, raw times and infighting between different groups of stakeholders (unions vs companies). You can write it off as random incidents, or you can understand it under the lens of increased costs and multiple competitors trying to get each a bigger slice of a shrinking pie. I have seen during my lifetime how conditions for the passengers have deteriorated. I recall as a teenager or a young adult, boarding a plane was a wonderful experience. Now a days, they treat you like cattle, and I am not just talking about the hardships imposed by TSA screenings (though they take a fair share of the blame). If you add two plus two, you will find that this decreased passenger comfort is tied to cost cutting measures. But why to cut costs if you can simply pass those cost to the customer and keep the quality of service up? I do not presume to know the answer, but my intuition tell me that the leadership at airline companies have run the numbers and figured out that there is some sort of inflection point in the demand curve, and an increase in prices would cause a severe drop in usage. Instead, a less bad alternative is to cut cost, punish quality, and face a small decrease in demand, but as long as the margin remains in the black the company can keep operating, and wait for better days. My fear comes mostly for the moment when airlines run out of comforts, and begin cutting cost in critical areas of operations such as plain maintenance. Even a modest number of non-fatal incidents may shift perceptions of safety and make the bottom of the bucket fall from under the demand pool. Now that I think about it, this is a market ripe for disruption.