Gasoline prices are over $4.50 a gallon in California . A few months ago, it used to cost me less than $25.00 to fill up my 2006 Honda Civic tank ~ now it costs me over $50.00 . I'm already limiting my driving and I get over 35 miles a gallon.
Here are three reasons why we could see gas at seven dollars a gallon before September ~
1. The United States edges closer to war with Iran ~ which it already is.
2. Monster Hurricanes hit the Gulf of Mexico in late summer.
3. Refiners and Retailers See Profit Margins Squeezed ~ which is already happening.
When we couple this high possibility of 7 dollar a gallon gas with massive unemployment and foreclosures ... many evicted families living in tent cities with cars they can't afford to drive ... food shortages and the real possibility of food and fuel riots ~ your looking at a REAL depression.
The United States is not alone in dealing with these deep economic problems ~ check out the extreme exposure to a bursting housing bubble the UK's economy is now grappling with ... http://www.moneyandmarkets.com/issues.aspx?UK-Housing-Bust-Spells-Trouble-for-Pound-1932
Sean Brodrick, Money and Markets, describes the perfect American economic storm that is almost ready to make landfall.
Allen L Roland http://blogs.salon.com/0002255/2008/07/06.html
Prepare for Hoarding and a
Recession-Turned-Depression
Money and Markets http://www.moneyandmarkets.com/issues.aspx?Oil-Crisis-Worsening-Whats-Next-1926
" Why hoard? Well, when the price of gas rises 10 cents in a week, as it did in my neighborhood, it starts to make economic sense to hoard gas. Say you run a lawn service that uses 500 gallons of gasoline a week. If you buy next week's allotment ahead of time, you can save $50 a week.
And if refinery utilization is so low that gasoline stations simply run out — or a massive hurricane takes out refinery capacity — then you'll see hoarding kick into overdrive. This will only deplete stockpiles that are already near historic lows, making the whole situation much worse. Eventually, we may get to the point where you are unable to buy gas.
I'm talking about actual gasoline shortages ... massive unemployment and foreclosures ... evicted families living in tent cities and cars they can't afford to drive ... maybe, if things get really bad, food shortages and food and fuel riots.
At $7 gasoline, those making less than $25,000 a year will see gasoline expenditures go from 7% of their income to 20%. For some people, it simply won't be worth it to drive to work.
Factor in the airlines parking planes, delivery trucks no longer running, fishing fleets staying in port, and car manufacturers going out of business.
Wait a minute ~ car makers going out of business?! Yep, GM is on deathwatch now, and it's not getting better. In fact, according to a leaked report from J.D. Power and Associates, the June seasonally adjusted annual sales rate will plunge to 12.5 million vehicles, down from 16.3 million last June.
Add it all up, and America has the ingredients for a major economic collapse."
Allen L Roland http://blogs.salon.com/0002255/2008/07/06.html
