Category Archives: Energy

Hanesbrands Ships Even More American Jobs To China !

..And some people wonder why the American economy is on life support.

Hanesbrands, Inc., the North Carolina based clothing manufacturer best known for their Hanes, Champion and Playtex brands, has given up on more American workers. Two weeks ago, they announced the elimination of more than 8,000 jobs, or 12% of their payroll, and the closing of nine plants in five countries. The job cuts will include 1,300 workers in North Carolina alone. If you’re looking for work in China, you’re in luck. But if you’re looking for work in North Carolina, tough luck. Hanesbrands expects to hire 2,000 employees in China by the end of the year. They’re also building a new textile fabric plant in Nanjing, China.

What wonderful news for the American economy !

Hanesbrands is giving up on workers in Central America as well, including Costa Rica, El Salvador and Honduras. Apparently, not even low paid workers in these countries can compete against China. While it looks like most of these jobs are going to China, the company also said they will be moving production to plants in Vietnam and Thailand. It’s probably just a coincidence that these may be some of the worst countries on earth, in terms of worker exploitation (see “Secrets, Lies and Sweatshops“, Businessweek, 11/27/2006).

Al Norman over at The Huffington Post has written an excellent piece about Hanesbrands’ abandonment of American workers. He puts the blame squarely on retailers like Walmart, and the consumers that flock there looking for cheap goods. In fact, he calls Walmart “the travel agent for Hanesbrands”.  Also check out our article from last December, “The Walmartization Of America“.

Take a look at Hanesbrands’ CEO Richard A. Noll’s total annual compensation at We would have less of a problem with the top management at a company receiving obscene levels of compensation if they were able to provide employees with secure jobs, and pay them decent wages. We’ve read opinions that most all CEOs at U.S. corporations are good, decent, intelligent people, and we trust that Mr. Noll fits that profile. But when large numbers of your employees are getting pink slips, and you are closing many of your factories, it seems to us that the pain should be shared by the most highly compensated employees at the company. If top management doesn’t see fit to spread around the pain, then the company’s directors should address the issue. Come to think of it, if Hanesbrands’ manufacturing is moving to low-cost places like China and Vietnam, perhaps their CEO position should move there also, to be closer to their workers. You could probably find a very capable CEO in Ho Chi Minh City, who would take the job for about 50 cents a day.

Do you think it’s possible for someone like Mr. Noll to comprehend the impact of the plant closings on an employee who has spent their entire career in a North Carolina textile factory, and is now told that their job is being sent to China? If you do the math, it would seem that if Mr. Noll and other executives at Hanesbrands took a modest cut in their annual compensation, Hanesbrands could afford to keep at least one of their North Carolina plants open, and many of their loyal employees on the payroll. It would sure be interesting to hear some of their soon-to-be-jobless employees’ opinions on the subject. Obviously, making tons of money is nice, but at some point, doesn’t the voice of reason (or perhaps conscience) tell you what the morally right thing to do might be ? Dining on Prime Rib is nice, but we would have trouble swallowing if we were surrounded by people who were starving to death. It’s also all about loyalty, which seems to be in terribly short supply in the American workplace, in the executive suite, as well as on the factory floor.

We believe, and we’ve written previously, that the loss of jobs and manufacturing capacity in the United States is at the root of our current economic woes. The withering stock market, the banking and real estate crisis, the credit crunch, the decrepit state of the U.S. auto industry and the weak U.S. dollar are all symptoms of an economy decimated by companies who have abandoned the American worker, in search of profits in places like China.

You know, those cheap Hanes socks, underwear or other garments at your local department store may not be the bargains they appear to be. Actually, you might not be able to afford the type of bargain that Hanes is offering !

Let’s say that you’ve had it with companies that have moved their manufacturing to China. This mom did, and she decided to boycott all Chinese-made goods for one year. She is a reporter, and wrote about her quest, in “A Year Without China: One Mom’s Fruitless Quest To Boycott China”. Her experience is quite interesting, and includes a futile attempt to avoid Hanes products made in China.

Last week, we were reading the New York Times, when an ad practically jumped off the page at us. With the title “Even The Rope We’re Hanging Ourselves With Is Made In China”, it echoes our feelings about what is wrong with the U.S. economy. A play on Lenin’s quote “The capitalists will sell us the rope with which we will hang them”, to be sure, but also very true with regard to the state of the U.S. economy.

The “rope” ad is from an organization we had never heard of, called The Institute For America’s Future. We urge you to visit their website at They are warning America about exactly the same things we’ve been writing about; the trade deficit, the exporting of American jobs, the loss of manufacturing capacity, and the dependence on foreign oil.

Doctor Bush and his band of merry economists can throw 700 billion band-aids at the problem, but that will have little effect. The patient is hemmorhaging, and unless the source of the bleeding is addressed, all the band-aids in China (or all the tea in China) won’t save the patient. President Bush has recently resorted to his emergency “fireside chats” with the American public, making his morning televised appearances to try and reassure the nation in the face of the economic meltdown. We think we can safely say these little pep talks have done nothing to calm Wall Street, or reassure the man on the street. They are too little, too late, from an American President who really doesn’t seem to get it.

And look at the $85 billion bailout of AIG, a company in such bad financial shape that they could afford to squander close to a half-million bucks on an “executive retreat” at a California resort, just days after lawmakers signed off on their bailout. But then, when your rich uncle is writing you a check for $85 billion, that hotel tab probably looks like pocket change. Talk about laughing all the way to the bank. It’s like giving a few bucks to a homeless person begging on the street, who then uses your money to hire a limo to take them to the welfare office. If AIG’s behavior isn’t criminal, it certainly should be.

And of course, when Robert Willumstad, the Chief Executive at AIG (he lost his job a day after the federal bailout was announced) is hauled before lawmakers on Capitol Hill, and asked to justify the squandering of money on a “retreat” at a California resort, which included $23,000 spent on spa treatments for AIG employees, he understandably pleads ignorance, telling the House Oversight and Government Reform Committee that he was “not familiar with the conference”.

In the last week or so, we’ve witnessed what historians will refer to as “The Stock Market Crash Of 2008”. The crash, proceeded by the economic epidemics of layoffs, home foreclosures and bank failures would seem to indicate to reasonable people that the U.S. economy, at the very least, is in a recession. In response to the crumbling economy, the U.S. government has taken unprecedented action to shore up banks, insurance companies and investments such as money market mutual funds. Yet, the Bush administration cannot bring themselves to using the “R” word. The Bush administration is in denial.

Good luck to the presidential candidate who will inherit this mess 100 days from now. Whichever candidate that happens to be, we think their first order of business, their top priority, must be to bring American jobs back to America, and to address the trade deficit and our dependence on foreign energy.

– Routing By Rumor



Filed under Automobile Manufacturers, Business, Cars, China, Consumerism, Employment, Energy, Jobs, Labor, Life, Money, News, Politics, Routing by Rumor, Stock Markets, The Economy, Your Money

The Banking Meltdown Is Just A Symptom Of A Much Larger Problem

They’re comparing this week’s financial events in the United States with those that led to the start of the Great Depression. But make no mistake, the United States’ economy has been headed for disaster for years now. The loss of decent-paying jobs, the record number of home foreclosures and the depressed real estate market are all symptoms of a far greater problem. The near-collapse of the American banking system may be linked to the mortgage crisis, but look for a root cause elsewhere.

The looming failures of financial giants including Lehman Brothers and Merrill Lynch, and insurance companies such as AIG, have created shock waves felt from Wall Street to Main Street. For the first time in memory, people were concerned that the money in their bank accounts, money market accounts and retirement plans was at risk. A 1929-style run on the banks appeared to be imminent. Indeed, people started pulling their money out of money market accounts at an unprecedented rate. Even investment professionals are running scared. Putnam Investments was so rattled by recent events, that they suddenly decided to close and liquidate their $12.3 billion institutional Putnam Prime Money Market Fund, which had experienced a run of redemptions last Wednesday. (Read about money market funds “breaking the buck” in this article, or in this blogger’s posting.) In the seven days ending this past Thursday, Americans collectively pulled a quarter of a trillion dollars out of their money market accounts, an indication that people are frightened. This has led to the government announcing that money market mutual funds will now be insured in much the same way that FDIC insurance protects bank deposits, although the insurance coverage is currently planned for only the next year (we think you can bet your bottom dollar (pun intended) that this insurance will become permanent).

Within the space of just a few days, the government’s $75 billion bailout of AIG grew into a proposed $700 billion bailout of the entire mortgage mess. (Didn’t something like that happen in the movie “The Blob That Ate Pittsburgh”?) The government certainly has the ability to print as much money as it needs to put out these brushfires, but it’s foolish to believe that the federal government throwing money at the problem will make it go away for any length of time.

The economists here at Routing By Rumor point to two very basic problems that the country’s economic woes can be directly attributed to. The first problem is that America is sending about half of it’s cash to the Middle East to buy oil. The second problem is that the rest of America’s cash is being sent to the Far East, mainly to China, to pay for just about everything else we consume. Unless this situation changes, the U.S. economy will never recover, and the current round of federal bailouts are just the beginning.

America has made little progress towards energy independence, despite 35 years having elapsed since the oil crisis of the early 1970’s gripped the nation. A second oil crisis in the late 70’s, as well as dramatic increases in the price of oil in the recent past have done nothing to break our dependence on foreign oil.

America has become dependent on China for almost all consumer goods. This is not only foolish from an economic perspective, it also presents a grave risk to America’s national security. We manufacture almost nothing domestically any more. We’ve said this before, and we’ll repeat it again… God help America if we ever go to war with China, because if that should ever happen, you might as well just go ahead and hang a picture of Chairman Mao in your living room. Now take a look at Walmart, the largest retailer in the United States. According to, more than 70% of the goods on Walmart’s shelves are made in China. To be fair, that’s probably no different than any other American retailer, but in our mind, Walmart is little more than a sales agent for China, Inc.

Just how bad have things gotten ? According to this CNN article, the United States Department of Agriculture says that 50 percent of the apple juice imported into the United States comes from China (an estimated 161,000 tons of apple juice compared to the 110,000 tons produced in the United States). If we’re reading those numbers correctly, that means the United States only produces 25% of all the apple juice it consumes.

Apple juice !!! What the hell is happening to our country ?

People, there’s something very, very wrong with the U.S. economy, if we can’t even grow our own apples in this country anymore. We’re in deep, deep trouble if we’ve even become dependent on China for apple juice.

They better come up with a new saying, because “As American as apple pie” doesn’t hold true any more.

When the presidential candidates show up for their next press conference or debate, in addition to the standard questions about abortion, the death penalty, Iraq and tax reform, perhaps someone can ask them to take off their shoes and tell us where they were made, and whether they see that as a problem. Or, ask them to remove all of their clothing that was NOT made in the U.S.A. That should be quite revealing.

Then there’s the U.S. banking industry, which to us, resembles nothing so much as legalized loan sharking. Banks are, on the one hand, paying minuscule interest rates to depositors, with regular savings accounts and interest-bearing checking accounts paying perhaps 1% or so, and in many cases, just a fraction of one percent APR or APY (the switch from quoting interest rates paid as APY, instead of APR is a scam onto itself, but we’re digressing). On the other hand, banks are charging 15% or 20% interest on credit card balances, and in some cases, as much as 35% or 40% APR for their less credit worthy customers. Did you know that federal law places no limit on the interest rate a bank can charge ? And while some states do so, there are states which do not cap interest rates. That’s why it’s likely that when you mail your monthly credit card payment, the address on the envelope is usually in South Dakota or Delaware, where, as far as credit card interest rates are concerned, the sky’s the limit.

Take a look at the off-the-wall late fees and other penalty charges that banks are getting away with, since a 1996 Supreme Court ruling removed limits on such fees. Today, typical credit card late fees are as high as $40, and continuing to go up. In fact, if there’s one thing that amazes us, it’s the way that banks continually come up with new ways of putting the squeeze on credit card holders. That’s why you continually get notices from card issuers, announcing changes in your account terms. It’s surprising to us that none of those notices have yet advised us that a late payment will result in a guy named Guido paying us a visit around midnight, to negotiate a repayment schedule using his Louisville Slugger.

We think most American’s have lost any trust they might have had in that cesspool called Wall Street, where, it seems to us, the average investor doesn’t stand a chance. Maybe Eliot Spitzer was on the right track after all, with his aggressive investigations. The well publicized scandals, insider trading and other illegal activities involving Wall Street firms and the companies that trade their stock there have eroded investor confidence. And while we don’t think it’s fair to single out any one individual, just take a look at the Dick Grasso case. How do you think the average American who is struggling to pay their mortgage or feed their family, feels about a situation like that one ? And yet, despite the current financial crisis in the United States, don’t expect CEO compensation to decrease much, even at companies that have to be bailed out with federal money.

So while the billions of dollars that Washington is throwing at the financial crisis will probably stabilize things in the short term, don’t start singing “Happy Days Are Here Again” just yet. They are not.

If you want to hear what it will sound like if happy days ever do get here again, check this out.

– Routing By Rumor


Filed under Business, China, Consumerism, Employment, Energy, Energy costs, Food, Jobs, Labor, Money, News, Politics, Retail, Retailers, Routing by Rumor, Scams, Shopping, Stock Markets, The Economy, Walmart, Your Money

Dear President Bush: Send More Money !

President George W. Bush
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear President Bush,

Just wanted to let you know that we received the very generous “economic stimulus” check you sent us recently. It was greatly appreciated.

We thank you.

ExxonMobil thanks you.

The oil speculators thank you.

Saudi Arabia thanks you.

(just to name a few)

Oh, I almost forgot… There’s just one problem. It’s all gone. With each visit to the gas station costing $75.00, your check didn’t go as far as we expected. And now, our gas gauge is on empty again.

Please sir, may we have some more ?


Routing By Rumor

P.S. – Please also send another check to all of the people who have posted comments below.

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When We Speak, Wall Street Listens.

One of the great things about hosting a blog at is the various tools and statistics they provide (thanks, Matt). You can see how much traffic your posts attract, how your visitors are finding your blog, what search terms people are using to find you (but sadly, not which search engine they used), and what hyperlinks in your posts they click on.

We were quite surprised this morning, when we noticed that was sending traffic our way because of this article we posted yesterday about the U.S. economy. We had mentioned that New York and New Jersey utilities, including Consolidated Edison, had recently gotten steep rate increases approved by regulators, some as much as 25% and 50%.

Within a few hours, visitors to Nasdaq who looked up Consolidated Edison (NYSE: ED), were seeing a link to our blog in the “Comments From The Blogs” section on This is yet another example of how blogging has really gained legitimacy, and how mainstream media and even Wall Street have taken notice of what is being discussed by bloggers. To be sure, it is a bit of a trip, realizing that almost anyone with a computer and Internet access can have their voice heard by the world. To us, that’s perhaps the greatest thing about this experiment they call the Internet. It transcends borders (although some regimes try to surpress it), it makes the world a very small place, and it gives you access to views and opinions you would otherwise never hear. How great is that?

Now that Routing By Rumor is (almost) a household name, we want to let the New York Stock Exchange know that we are available, should Dick Grasso’s old job still be open. However, in light of the firestorm that his $140 million retirement package caused, we want to go on record as saying that we will not accept a deferred compensation package of more than $75 million. We think that even Eliot Spitzer, the former New York State Attorney General turned New York Governor (and no friend of Dick Grasso’s), who’s career crashed and burned in a sex scandal, would approve of that.

– Routing By Rumor

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George Bush Fiddles While The Ice Caps Melt

Polar bears' extinction threatened by global warming ?
photo credit: Associated Press / Johnathan Hayward

Apparently, protecting our planet takes a back seat to protecting Big Oil’s profits, as far as George Bush is concerned. No big surprise there, as Bush was an oil man long before he was running the country and it’s economy into the ground. Perhaps Mr. Bush is not concerned about global warming because the White House is air conditioned.

On Friday, President Bush rejected imposing government regulations that would aim to control the United States’ production of greenhouse gases, which are blamed by scientists for global warming. He claims that doing so would hurt the economy and cause too many job losses.

Well, it’s kinda nice that he is concerned about the economy and about American workers, but what do you think that shipping nearly all of America’s manufacturing jobs to China has done? Perhaps you haven’t noticed, Mr. Bush, but the U.S. economy is in shambles. Barack Obama is smart enough to acknowledge that.

As far as protecting jobs, it’s great that Mr. Bush has finally gotten religion about the plight of the American worker, but if you want to protect Americans, preventing a global environmental catastrophe might produce a better return on investment. It will also protect American’s lives as well as their jobs and the economy.

Just how much damage are we doing to the environment from the burning of fossil fuels?

As of 2006, the world was consuming 86 million barrels of oil every day. With 42 gallons of oil in each “barrel”, that equals a mind-boggling 3.6 BILLION GALLONS of oil per day ! That’s more than 2.5 million gallons of oil every minute. We find it incredible that the world’s oil wells can pull that much crude oil out of the Earth. It’s truly hard to believe.

How much money is at stake for the nations, corporations and individuals that profit from oil ? Well, (pun intended) at the current price for crude oil, it’s more than $12 billion a day. That kind of money gives a lot of people a very strong incentive to maintain the status quo, ice caps and planet be damned.

At that rate of consumption, it seems unlikely that anything we try to do to reduce the production of greenhouse gases can have a significant effect, but we must do something.

If global warming is indeed occuring because of our consumption of fossil fuels (which includes oil), then it really does seem to be an intractable problem unless we can drastically reduce our consumption of fossil fuels. To put it in medical terms, if you have a hemorrhaging patient, all the blood in the world won’t save them unless you can stem their bleeding.

The world’s industrialized nations are so dependent on oil that there is no simple answer. Technologies such as solar, wind, or wave power are not currently capable of lessening the world’s dependence on oil to any great extent. Even if every gasoline and diesel powered vehicle on the planet could be replaced by electric vehicles, it wouldn’t eliminate most of the greenhouse gasses being produced. That’s because most of the electricity generated in the world is produced by burning oil, coal and natural gas.

Yet with the enormity of the problem clear to almost everyone, and more evidence of global warming becoming available every day, President Bush has chosen to do nothing.

Foreign leaders who attended the just-concluded G-8 summit in Tokyo must think there are two George Bushes (actually, there are, but that’s another story). At the G-8 summit, the United States joined other nations in supporting policies that will effect a 50 percent reduction in global greenhouse gases by 2050. If Mr. Bush is serious about reducing greenhouse emissions, you’d be hard pressed to find any proof of that.

We propose a summit of a different kind. How about putting President Bush on a melting iceberg, along with a group of eight polar bears (the G-8), where they could engage in a constructive dialog about what global warming means to them. In that environment, free of political pressure from Big Oil and forced to confront the issue, Mr. Bush might decide to act in a more immediate way to limit greenhouse gasses. Come to think of it, you might want to have that iceberg summit take place in Prince William Sound, Alaska, where the local wildlife has some firsthand experience with Big Oil, courtesy of the Exxon Valdez.

– Routing By Rumor

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Newspapers Are Now Obsolete. Introducing News Headlines Mad Libs !

With apologies to Andy Rooney

Ya ever notice how the same news keeps showing up in your newspaper day after day ?

…and how it always seems to get worse ?

Well, the newshounds at RoutingByRumor have figured out how to save you some money, and save some trees at the same time. Instead of buying a newspaper every day, why not try this update of the word game “Mad Libs” to get your latest news.

If you’re one of the few people on the planet who have never heard of Mad Libs, read this before you continue. And yes, the Web does indeed have everything, including the kitchen sink. There is even an official Mad Libs website.

And remember… “no news is good news”.



The __________________ Corporation (fill in the name of a food or consumer goods company that has shipped all of it’s manufacturing to China) has announced the recall of ____________________ (fill in the name of a food product or child’s toy) due to possible __________________ contamination (fill in the name of a poison or carcinogen) or choking hazard. Consumers are advised to return the product to the store where they bought it.


Scientists monitoring the effects of global warming today observed the breakup of a ____________________ (fill in a really big number) square mile section of the Arctic ice pack. This is the largest loss of Arctic ice ever observed in a single day, and is further evidence of global warming.


The U.S. Department of Agriculture has announced the recall of ____________________ (fill in an agricultural product) which is suspected in a recent outbreak of ____________________ (fill in a food-borne illness). There have been ____________________ (fill in a number) suspected cases reported in ____________________ (fill in a number) states.

In an unrelated case, the ____________________ (fill in the name of a meat processor) corporation has announced the recall of ____________________ (fill in a very large number) pounds of ground beef, after tests have indicated possible contamination with e-coli bacteria.


Crude oil prices have hit another record high, closing yesterday at ____________________ (fill in a very large number) dollars a barrel. Regular grade gasoline is now an average of ____________________ (fill in a very large number) dollars a gallon nationally, and diesel fuel is now averaging ____________________ (fill in a very large number) dollars, across the nation.


Food prices have taken another steep jump in the past month, with a seasonally-adjusted increase of ____________________ (fill in a number) percent. Spurred by steep increases in energy and commodity prices, this is the ____________________th (fill in a number) straight monthly increase in food prices. Recent ____________________ (fill in a weather-related disaster, such as flooding, drought, forest fires, locusts, hail, etc.) in key ____________________ (fill in a food commodity) producing areas has increased the likelihood of further price increases and tight supplies of ____________________ (fill in a commodity) for the foreseeable future.

The ____________________ (fill in a major corporation’s name) company today announced plans to lay off another ____________________ (fill in a large number) thousand employees in coming months. Blaming the decision on the sluggish economy and increased foreign competition, they said further workforce reductions might be necessary.

Also, the ____________________ (fill in a major retailer) corporation today announced plans to file for chapter 11 bankruptcy protection. In the latest quarter, they posted losses totaling ____________________ (fill in a really big number) dollars. They also announced plans to close ____________________ (fill in a big number) of their least profitable stores, and lay off ____________________ (fill in a big number) thousand employees.

The Pentagon has announced that another ____________________ (fill in a number) servicemen have died in fighting in ____________________ (fill in either “Iraq” or “Afgahnistan”). This brings the total death count to ____________________ (fill in a very large number) since the war began. The Pentagon has also announced that the tours of duty for ____________________ (fill in a branch of service) in ______________________ (fill in “Iraq” or “Afghanistan”) will be extended by ____________________ (fill in a number) months.

In a related story, suicide bombers have killed another ____________________ (fill in a number) people in the Iraqi city of ____________________ (fill in the name of a city in Iraq), after detonating ______________________ (fill in “a car bomb” or “explosives strapped to their body”) in a crowd of people gathered for ____________________ (fill in any reason people might gather in a group), and another ____________________ (fill in number) U.S. servicemen have been ____________________ (fill in “killed” or “wounded”) by a roadside bomb in ____________________ (fill in the name of an Iraqi city).


The New York City Medical Examiner’s office announced today, that another victim of the September 11th attacks has been positively identified thru the use of DNA testing. Bone fragments belonging to ____________________ (fill in yet another victim’s name), which were recovered from ground zero in the weeks after the attacks, were re-tested using new technologies which were unavailable until now. This brings the confirmed number of victims of the 9/11 attacks to ____________________ (fill in a very large number that should wake up every American to the evil we are up against), making 9/11 the single deadliest enemy attack on U.S. soil in the nation’s history.

In a related story, redevelopment of the former World Trade Center site in lower Manhattan has again suffered a setback, after ______________________ (fill in just about any reason imaginable ) has caused yet another delay in construction activity at the site. The reconstruction plans for ground zero have been mired in controversy, cost overruns, ____________________ (fill in another of the hundreds of reasons for the delays), and complaints from families of 9/11 victims, unhappy with plans for a memorial at the site.


____________________ (fill in the name of a U.S. presidential candidate) has declared his intention to ____________________ (fill in either “end the war” or “win the war” or “increase the number of troops in Iraq and Afghanistan”) within ____________________ (fill in a number) days of being sworn in as President. Speaking from the campaign trail, he spoke to reporters about the growing dissatisfaction among Americans about how the war is going, and promised quick and decisive action to change the course of the war.

Also, in responding to reporter’s questions about ____________________ (fill in an embarrassing or troubling incident that has been dredged up from his past), he denied _____________________ (fill in “ever making the statement” or “ever meeting with the person” or “ever belonging to the group” or “ever voicing support for the group” or “ever practicing that religion” or “ever losing his temper”), blaming those rumors on ____________________ (fill in a political party) supporters trying to derail his campaign.
So there you have it… All the news that’s fit to print, and no need to buy a single newspaper.

– Routing By Rumor

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The $10 Gallon Of Gasoline Is Possible, But They Still Won’t Wash Your Windshield !

How high will the price of a gallon of gasoline go? Regular grade gasoline is at or above $4.00 a gallon across the United States now, and crude oil is hovering in the $135 a barrel range. In fact, gasoline is close to $5.00 a gallon in some areas, and diesel fuel is averaging just about $5.00 a gallon across the nation.

At these prices, you’d think a whole squadron of singing “Texaco men” would descend on your car when you pull into the service station, cleaning your windshield, checking your tire pressure and oil level and polishing your headlights. As the jingle promised, “You can trust your car to the man who wears the star… The big, red Texaco star” (or maybe it was “the big, bright Texaco star”). Today though, all you’re likely to find at your local gas station are self-service pumps. If you’re lucky enough to find an air hose to inflate your tires, you’ll probably have to pay for the air and do it yourself.

U.S. DOE EIA\'s Gasoline Price Graph

This gasoline price graph is linked from this U.S. Dept of Energy EIA page, and

should display their current data. For EIA’s Diesel Fuel price history, click here.

We have previously questioned what a flareup in Middle East tensions might do to the price of crude oil. In today’s news, there was speculation that an Israeli military exercise earlier this month may have been a not too subtle hint that they may be preparing to (or at least want to appear to be preparing to) attack nuclear facilities in Iran.

There has been speculation that if Iran reacted to an attack by blockading shipping in the Strait of Hormuz, the price of crude oil on the world market could quickly hit $300 a barrel. The Strait of Hormuz is a 21-mile-wide strategically important body of water between Iran on the North, and the United Arab Emirates and Oman on the South. It is the only shipping route for much of the oil exported from the Persian Gulf.

Just how serious is the threat of an attack on Iran? Mohamed ElBaradei, head of the United Nations’ International Atomic Energy Agency, said in an Interview on Arab television on June 21st, that “any military strike on Iran could turn the Mideast to a ball of fire” (see CNN article). This raises the possibility that the United States, the United Nations, or an international coalition might take military action to keep the Strait of Hormuz open to shipping to keep oil flowing.

The brilliant mathematicians at RoutingByRumor (they stay in our ivory tower) figure that a $300 barrel of crude oil would equate to a gallon of gasoline in the $10 to $12 range. That is, if you are able to buy it at all. Could you imagine the prospect of a $200.00 fill-up at your local gas station? We think the oil companies might have to start using armored cars to deliver the gasoline to their stations. Carjackings might become commonplace, not for the vehicle, but for the contents of it’s gas tank. Imagine what these stratospheric fuel prices would do to the American economy, which is already hurting because of the price of oil.

What we think future gasoline deliveries might look like !

For many Americans, we think gasoline at $10.00 a gallon would quite literally make it too expensive to commute to work (unless they are lucky enough to be driving one of these vehicles). Many Americans without access to public transportation would simply be better off staying home. Imagine what $10.00 gasoline will do to food prices, already spiraling out of control because of the current price of crude oil. People unfortunate enough to have oil heat will be unable to heat their homes.

So there you have it… Record high gasoline prices, military posturing by Israel towards Iran, warnings of an apocalyptic conflagration in the Mideast, and the supply of crude oil from the region hanging in the balance. Things do not look good for oil or gasoline prices or an uninterrupted supply.

You know, that old pair of inline skates in the attic, and that rusty old Schwinn in the garage are looking better every day now. Or maybe we will get a Delorean like the one from Back To The Future, with a “Mr. Fusion” Home Energy Reactor that can run on banana peels and half-empty cans of beer.

Dr. Emmett Brown (Christopher Lloyd) fuels up his Delorean’s fusion

reactor with banana peels and beer, in Back To The Future


– Routing By Rumor

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