Of Looting and Gouging

Wednesday morning the effects of hurricane Katrina were obvious on Algonquin Ave in North Bay. I was slightly discouraged to see the looting in New Orleans as police looked on, but when some people were only taking food and water to survive, I thought, okay, do what you have to do to stay alive. Lugging off TV sets to a place that was still filling with water, that would be without electricity for months and indeed to a place that you may have to leave, seemed sort of stupid, but I suppose opportunistic.

But on Algonquin Ave, in plain view of the police, a gas station operator was looking up and down the street with his binoculars at other vendor’s signs to see what the market would bear. In a matter of a few minutes the price climbed over 15 cents per litre to come to a stop at 125.9. It was nice that these people had some sense of propriety or who knows where the price would have ended. At least I know now that it is not the Big Oil companies who control the pricing at the pumps, but our greedy neighbours. Personally, they are not much better than the looters in New Orleans, but maybe it is just our capitalistic system as its best.

It is unfortunate that Canada does not have enough oil refinery capacity to be independent of the US market. This latest natural disaster ought to be a wake-up call to us as our neighbours’ influence on us may bite us even more times in the future. Of course we all know that we are not yet short of fuel in Canada and that the pricing is caused by the Wall St and Bay St looters and gougers whose greed seems endless as they manipulate the price of commodities.

Which got me to wondering where the people in the southern states hit by Katrina are going to get the lumber, plywood and particle board to rebuild? When the stockbrokers in New York and Toronto hear about the forest fires in British Columbia and Ontario and the feu des bois in Quebec and New Brunswick and how these natural disasters are going to affect the supply of softwood lumber, softwood futures may rise! Added to this is the higher cost of fuel that they themselves caused, and the price of building materials is going to skyrocket. Demand will soon outstrip supply and that will give legitimate reason for our big producers to yank up the prices. If they think the softwood tariff was a problem, they had better brace themselves!

Unfortunately the Katrina effect is going to be with us for a long time. Some commodities are going to be in short supply. If you are going to do any home renovations, I suggest you get your supplies now before the building suppliers get out their binoculars.

Prices on many commodities, including foodstuffs, are going to creep upwards as fuel costs are added into the distribution network. The looters and the gougers will exercise free enterprise and will have a heyday as our governments struggle to bring order the system. And if you thought the effect of 911 on insurance rates was atrocious, wait for the Katrina effect.

My only hope is that those unfortunate people in Mississippi and Louisiana do not get hit with another hurricane this year.