It was just over three months ago that we noted that the price of crude oil had passed $100 a barrel for the first time ever. Now, in less than four months, it has increased another 40%, and is closing in on $140 / barrel. Almost every day sees a new record high for the price of crude, and Friday was no exception. That equates to an annual increase in the price of oil somewhere around 150%. Based on the past few months, we think oil might hit $200 a barrel before the end of the year. If you think the U.S. economy is in trouble now, imagine what that will do to it.
Gasoline is at or above $4.00 a gallon in much of the U.S., with predictions of $5.00 to $6.00 a gallon by the end of the summer. It seems that those economic stimulus checks that Uncle Sam and his nephew George W. were kind enough to send y’all are little more than a gift to the oil companies and market speculators. Being able to afford to fill their gas tanks is the number one concern for most Americans now. You would think that sky high gasoline prices would make a big enough dent in demand that there will be no gasoline shortages. The truth is that the underlying cause of high prices is a tight supply and global demand for oil. Because of this, we believe the next gasoline crisis is not too far down the road.
Look what fuel prices have done to the market for larger vehicles. Truck and SUV sales have dried up to the point that the market resembles the real estate market. Car dealers and real estate salespeople have joined the exclusive club once reserved for the Maytag repairman.
If you think increasing food prices and inflation in general are bad now (don’t believe the fairy tale statistics that Washington tries to feed you), just watch what happens over the next few months. Inflation, the cost of energy, and the economy (yes, Virginia, we ARE in a deep economic recession) are such problems that they have succeeded in replacing Iraq on the front page of your newspaper for the past few months.
These concerns have prompted the economic gurus at RoutingByRumor to come up with our top ten list of concerns that Americans are faced with…
- Skyrocketing gasoline prices (try filling your tank)
- Skyrocketing food prices (try keeping food on the table)
- Energy prices (try heating/cooling your home)
- Inflation (try to keep up)
- Skyrocketing healthcare costs (try getting sick)
- The real estate slump (try selling your home)
- The foreclosure crisis (try holding onto your home)
- The deteriorating job market (try finding a decent paying job, or any job at all)
- Stagnant or decreasing wages, benefits and income (especially investment income)
- The lack of leadership in Washington (try to find a real President)
Gee whiz… terrorism, illegal immigration and global warming didn’t even make the top ten. That’s how bad things are.
– Routing By Rumor