Dr X tells me that oil will hit $7 a Gallon

Dr. X and I had a conversation this morning. He tells me that they are now claiming oil will hit $7 a gallon. My Kate in Chicago tells me that gas in Chicago is $4.25 / gallon for regular gas. In the past year, the cost of gas has doubled and the barrel cost hit over $138. Did you know they developed Iraq's budget assuming a $30 barrel of oil. There is something amiss folks, something is wrong!

UNBELIEVEABLE.

The typical American will be broke and not out consuming goods and services. They are not going to be able to put gas in their cars and are not going to be able to fund the endless busses that will be required. (Busses will need more funding, I.e. more tax dollars. There will not be the funds to do it, so they will raise rates.)

There are those that are looking forward to this day because they long for an America that uses less cars to transport themselves to the retailer of their choice. They say we should crowd into more sustainable communities in the City. Umm, America works in the suburbs in most places. A more dense population has its own difficulties, yet, they don't acknowledge those realities. They are mistaken in that dream of a less mobile America.

A less mobile America will mean we spend less on gas but also less on retailers, dining, service fields, construction, etc. Basically less consumption. If we consume less, our economy will fall further into recession (gasp, depression). Our economy (and the world's economy) is driven by America consuming goods and services. We do not make hairdryers, toasters, etc here anymore. We staff stores, sell gas, go out to eat, see movies, etc. If one segment falls, then the next person can't do their part in Consumption America, and so on and so on.

We have outsourced our manufacturing, we are outsourcing our Engineering (yes, we our outsourcing our Engineers). We are becoming less self-dependent and becoming more dependent on disposable services/trades. We are losing valuable and useful skill-sets because we changed our focus to consumerism. (Yes, Sergio you are correct. We spent ourselves to prosperity and will spend ourselves to default. I agree it isn't sustainable.)

So, America we are in a pickle. We need to drill or at least build some refineries. Yes, we need renewable energy too. Why can't we have both? We need to stop the madness! Darn those polar bears, do they pay our bills all they do is swim and sleep. They are not helping us resolve our issues. We should care about the environment but we need to think of a solution that is not contained in a one-stop solution.

America needs to stop playing in the sun, winter is coming. We need to prepare what will happen to our economy if Dr. X is correct.

Grasshopper, start following the ants and start preparing your house.

To Victory in 2008,
JD