Pricing mechanisms make for some odd thinking, or thinking of odd things, whichever is more useful at the time.
$100 oil. Will this be the iceberg that rips open the prow of our economy? Perhaps I have an odd take on this, but when I look at ‘C’ note oil I still see a bargain for the user. Consider what petroleum provides us: hours of additional leisure each day, freedom from the exhaustion of providing our own locomotion, travel in relative comfort instead of exposure to the elements. And is $100 really all that much for 42 gallons of freedom? Consider some other liquids:
Coke Zero (NYSE: KO): a barrel of oil holds 42 gallons, or 5,376 oz. A 12-oz Coke Zero at vending machine prices would cost $448 a barrel.
Deer urine: Used by hunters to attract their prey, runs $10 for 2 oz. for the good stuff, fresh from a buck in rut, from Timber Valley Freshscent (“100% Fresh Urine. Shipped Cold From Our Deer To Your Door.”), or $26,880 per barrel.
Starbucks latte (NASDAQ:SBUX): at around $4 for a 12-ouncer, this black gold will set you back $1,792 a barrel.
Whiskas: a milk specially made for lactose-intolerant cats sells for $1.29 for a 6.75 oz box. A barrel would retail for $1,027.
And while oil provides essential transport, it pales by comparison with fluids that offer divine regard. In that respect, how could one complain about the cost of a Transparent Virgin Mary full of water from Lourdes, the site of St. Bernadette’s miracle. The bottle sells for a mere $26.71 for 350 ml, or roughly $11,996 a barrel.
Tap water is not often priced by market forces, and for some good reasons. If, however, it did increase to a level more in line with costs, I wonder:
1. What is a reasonable price to obtain potable water?
2. What is a resonable expenditure to improve infrastructure to avoid high volume leaks of a valuable product (50% often) in closed pipe systems, or what price to have access just in the neigborhood? Imagine half the cola produced leaking out into the neighborhood.
3. How does sewerage relate to water costs? The charges are increasingly becoming less tied to volume use of water, and more an across the board charge.
4. If agricultural pricing of water cannot actually compete with city prices, what is the cost to us in food prices to adjust production costs such as changing from open irrigation?