Gas Prices

Yesterday the US House of Representatives passed a bill giving the Federal Trade Commission power to investigate the Oil company profits. President Bush's Admistration says they will veto any such bill if it passes the Senate.

The representative that introduced this bill, Bart Stupak, D-Mich., should be commended for his hard work on this issue. On his website he says this...

While consumers are being forced to pay up to $3.00 a gallon for gasoline, oil companies continue to reap record profits. Last year, Exxon Mobil posted $36 billion in profits, the largest profit for any corporation in United States history. Moreover, over the past year, refineries have increased their prices 255 percent. As these profits increase, so does the potential for price gouging.

When talking about refinery profits, economists refer to the “crack spread,” which is the price difference between a barrel of crude oil and an equal amount of refined gasoline. Typically, a crack spread of $4-5 per barrel will cover a refinery’s costs. Anything over this amount is usually profit, although this can differ from one refinery to another. If a refinery has a crack spread of $8-9 per barrel, economists consider this spread as a good, consistent profit. It has been estimated that refineries’ current crack spreads are as much as $20 to $30 per barrel. Refinery companies are raking in these excessive profits at the expense of working Americans. This is price gouging, and Congress should give the Federal Trade Commission the tools to investigate these profits and prosecute those refineries that engage in unfair practices.

Read The Whole Article

Student Loans

One thing is for sure, when I started college I had no idea how BIG of a part my student loans were going to play in my first 10 years of life. Most 17-18 year old students applying for loans have no idea that when they choose a vendor they are choosing who to marry for the next 10-15 years.

Most student loan companies are scum, many will:

• Advertise at your school
• Buy their way into your school's finance office
• Sell your loan
• Change your rates (Usually up)
• Charge you fees
• Make it difficult to pay
• Forget to bill you for the first 3 months when you are off deferment

God Forbid you default:

• Your interest rates more than double
• Refer you to a collection agency... who will violate your rights
• Forbid you from consolidating
• Offset all of your tax refunds (steal them back, legally)
• Garnish your wages without a COURT ORDER!

You see if you are a loan company you want to be in the student loan business because the loans are guaranteed by the US Government. If you fail to pay, they can get the money by the government. And since the Government is cheap when it comes to they will get their money!

Forever Stamp

Today starts the Forever Stamp and the new 41 Cents Per stamp rate hike. Also, there are new rules about how THICK an envelope may be... must be under 1/4"... failure to do so will result in a fee for not being flat machineable. (80 cents instead of 41 on a First Class Stamp)

So, go on out there and pickup your new stamps. Wahoo! $20 says there will be some type of "emergency" rate hike before the year ends due to gas prices... stay tuned.

BTW, UPS raised their "Fuel Surcharge" on May 7th from 3.5% to 4%.

Trapped like a Lobster...

A couple of weeks ago I wrote an article about, "Are You Financially Ready?" And I know this is a money blog, but I think it is important to point out some changes in our borders that recently happened. As of December 2006, you pretty much need a passport to enter the country, no matter from witch country you travel.

In other words, if there were a national emergency, you needed to leave the country and you didn't already have your passport you will be waiting in line behind all those who didn't plan either!!!

My recommendation, even if you don't plan on entering or exiting the country anytime soon... get a passport. These booklets are excellent forms of identification in the case of an emergency, often times used as backup or primary sources of ID!

What you need to know:

• If you have never applied before you will need to apply in person.
• You fill out the form online, print it out... DO NOT SIGN IT!!!!
• You will need to present proof of US Citizenship (Birth Certificate)
• You will need to provide Proof of Identity (Drivers License)
• Two identical photos of you (Walgreens/Kinkos - Cost around $15)
• $97.00 (Check/Money Order)
• Go to a "Passport Acceptance Facility" (Usually a Post Office)
• You can check the status.

If you haven’t received your passport and are traveling within the next 7 days... call or email the National Passport Information Center.

Financial Peace University - Dave Ramsey

I am going to be a table leader at the upcoming Financial Peace University at Westside Family Church in Lenexa, KS. The class I will be at is on Tuesday nights starting in June. (See information below) I am sure that you might have heard our Dave Ramsey story before, so I'll tell you a new one.

This week, my Jeep's starter went out. In the past, my life would have been devistated with the repair costs. I would have put off the repair until I had the money. I would have had trouble sleeping because I knew that I was going to bounce checks. I would have put the repair on my credit card.

Today though, I live a different life. Even though I still have not completed all the steps from Financial Peace University, I plan on doing so soon. Thanks to these steps, my wife and I have $1000 in an emergency fund plus another $500 in a car emergency fund. It was no big worry when the car didnt start. This time I procrastinated getting it repaird because I wasn't concerned, not because I didn't have the money. It's an wierd feeling to no longer worry about car issues... I like being weird!

Financial Peace University
91 Days To Beat Debt & Build Wealth!
FPU is a video driven 13-week life-changing program that empowers and teaches you how to make the right money decisions. To achieve your financial goals and expirence a total money makeover. It will be offered on site at Westside Family Church. Material cost is $96.25 (couples share) and should be ordered through the church since the materials are more expensive direct from Dave Ramsey. See a Video

Lenexa Campus - 8500 Woodsonia Drive
1. Sundays beginning June 3 from 6:30 to 8:30PM (Orientation on May 20 at 6:30 PM)
2. Tuesdays beginning June 5 from 7:00 to 9:00PM (Orientation on May 22 at 7:00PM)

Overland Park Campus - WFC Offices at 9154 W 135th St
Sundays beginning June 3 from 7:00 to 9:00PM (Orientation on May 20 at 7:00PM)

For More information visit Dave Ramsey's Website or Westside Family's registration page if you are ready to register. Also, you may contact Niki Ezzell at nezzell@westsidefamilychurch.com or 913-890-4243.

How Much Money is in the Federal Reserve?

Trick question! The Federal Reserve System is neither Federal nor a Reserve! The Federal Reserve system was developed in secret by the BANKing industry and DELIVERED to congress for approval over many years of legislation and lobbying.

The Federal Reserve loans money to "member banks" so that they can lend more money than they actually have in reserve. The Federal Reserve chairman can produce more or less money as well as increase or lower interest rates charged to the "member banks." Doing these two things can help control inflation.

Inflation is the DEVALUATION of the dollar so that consumer good's prices seem to appear to increase. Inflation is caused by the basic economic principle of Supply and Demand. The more money available to the public, the less valuable it is.

Little known fact: When the government needs money to fund things like the war, they can go to the Federal Reserve Chairman and request those funds. The chairman then writes a check to the US Treasury for the amount needed and CREATES those dollars. Thus flooding the market with money that did not exist the day before.

3 Common Money Floods: (Causes of Inflation)

• As stated previously, borrowing by the government.
• Borrowing by the "member banks". Member banks can loan up to 9 times for every actual dollar they have in reserve. So, if they choose to streatch their dollar, they are actually creating dollars for the loan.
• Frozen Money. Money is frozen for many reasons; stuck in retirement funds, overseas in government vaults, savings by businesses for trade.

When you hear these three things on the news, remember, it's your TAX dollar that is paying for these! When we as a nation are at the highest national debt ever, you and I are being taxed. When the US citizens have more debt than ever, you and I are being taxed. When China buys US debt, they are doing so to help the dollar (since we are their biggest importer), when they sell it... it will tax us. Inflation is a tax!

Most Americans have no understanding of inflation. My statements are not political, if we must go to war... then we must go, but do not under any circumstance believe that it's paid for by anyone but YOU!

It is important that if you are saving money that your savings plan has at least a 6% gain over the long term. (3% inflation plus 3% taxes) Failure to do this means you could be moving backwards by saving.

Gas Prices (First Post of Many)

Well... there are a milion issues when we talk about gas prices. While there are a ton of issues that effect Gas prices, the issues are all Supply and Demand related. Sometimes even a 1% possibility of a supply change will cause our pump prices to increase.

According to CNBC... Gas prices are at an all-time high, averaging over $3.07 per gallon, the previous record high was $3.03 on August 11, 2006.

Things to know about Gas:

• There are two different supply chains.
  -The supply of Crude Oil from various sources including the Middle East.
  -The supply of refined Gasoline.
  This is the fundimental part most people don't understand. It is possible for us to have a great supply of oil and still not have enough refined gasoline, because that Crude oil is shipped to us and we have to convert it to gasoline for use.
• While we blame the Middle East for many of our gas supply problems, in reality/as of late, our gas prices are more effected by local production.
• When Crude Oil is refined, the oil is broken down into:
  -Natural Gas
  -Propane Gas
  -Automotive Gasoline (Liquid)
  -Kerosene (Liquid)
  -Jet Fuel (Liquid)
  -Disel Fuel (Liquid)
  -Industrial Fuel Oil (Liquid)
  So, when "gas prices" are up, usually all of the the above are effected in one way or another.
• The gas in the pump has already been paid for, the price you pay is based on what the station owner believes they will be paying to replace the gas you take.
• Supply and Demand says... When supply is up and demand stays the same, the price will go down. When deman is up and supply stays the same, the price will go up.
  In this graph, you can see that our demand [consumption - red line] is higher than last year's demand. Assuming that production is the same then, the prices must be higher than last year. (And they are) Graph: AG Edwards - Gasoline Chartbook - 05-02-2007 - Eric Wittenauer

Find Gas Prices in your Area at: Gasbuddy.com A cool new feature of the web site is the Gas Temperature Map.

When Will Gas Prices Affect Your Driving Habits?
When asked, “How high will gas prices need to get before you drastically alter the amount of driving you do?” 42% of respondents stated that they had already altered their driving, 25% said they would alter their driving at $4 per gallon, 20%stated they would alter their driving at greater than $5 per gallon and 13% said they would alter their driving at $5 per gallon.