Oil and gas prices have skyrocketed.
Interest rates are creeping up, slowly but surely.
The U.S. real estate market seems to be getting more and more speculative. When everyone seems to want to get into the act; it’s a sure sign the act is getting ready to close.
The Federal government is spending a lot more than it takes in. Borrowing yet more to buy a new city is likely to be expensive, too, on top of paying for a war here and there.
What does this have to do with computing, or overclocking? Well, none of this is exactly good for an economy, and you can’t overclock something you can’t buy (or borrow to buy).
The last few years, the United States has basically been spending its way to world prosperity, spending money it really doesn’t have. This couldn’t go on forever; and it’s not going to.
If oil and natural gas hang around at or near the prices they’ve been lately; it’s hard to see how this won’t trigger a recession, sooner or later.
Put simply, if you use 750 gallons of gas a year, and prices stay where they are, that means you’ll pay $750 more for gasoline than you did a year ago. You’ll see much the same for fuel oil/natural gas.
That’s a hefty hunk of change for enough Americans to curtail their buying other things to pay for fuel and heat.
After adjusting for inflation, U.S. gasoline prices since 1950 have almost always fluctuated in a range between $1.50 to $2.00 a gallon. The only big exception to that occurred around 1980, when gasoline prices jumped up to about (an adjusted) $2.80 a gallon, which triggered close to 15% inflation first, then afterwards unemployment rates of over 10%, a bit more than double what they are today.
Yes, in some ways, the U.S. economy is in better shape to absorb the impact of higher prices (the U.S. is less reliant on energy for growth now compared to then), but in other ways it’s in worse shape (we’re in more debt, a good chunk of today’s living Americans have no memory of a severe recession, and spend like it can’t happen again), One can argue endlessly the likely degree of impact, but it would be foolish to think there won’t be any significant impact.
This is not to say the U.S. economy will be going to hell tomorrow. If things are going to get bad, they’ll probably start getting bad in the U.S. next spring-early summer, and it could be bad for a few years. For those living outside the U.S., as the U.S. slows, so eventually will the world.
It is difficult to predict what a severe recession would do the PC market, since there was no sizable PC market the last time we had one in the U.S.. However, hard as it is to believe, you need to have gas to go to work and fuel to heat your home in the winter a lot more than a dual-core SLI machine (and not even Prescotts are good substitutes for central heating).
No doubt there will be bargains as a result, particularly earlier rather than later as companies try to keep production lines humming.
However, you can’t take advantage of a bargain if you have no money. It probably isn’t a bad time to start building yourself a little financial cushion, or at least cut down on the debt.
Remember, the people who do best in recessions are those who have cash handy to take advantage of bargains.
Be the first to comment