Good Morning Middle America, Your King of Simple News is on the air.
U.S. News: Oil climbed above $135 this morning and seems to have legs to go further. Is the cause for the spike the high oil company profits that the presidential candidates are screaming about? No, the presidential candidates are world champion fabricators searching for a distraction form the truth.
So if not high profits, is it the shrinking dollar that is driving the oil price skyward? Nah, the devaluation of the dollar has some influence, but not much. So it must be the speculators that Wall Street talks about huh? No, not that either, speculators couldn’t speculate long if no one paid the asking price for oil.
The legendary oil man T. Boone Pickens put it nicely yesterday when he explained that daily demand for crude is more than 2,000,000 barrels higher than production. He also explained that world production has peaked. Uh-oh, it’s that darn economics 101 in play again.
Just a tid-bit of information that you may find useful; King George went to Saudi Arabia and asked them to turn up the juice a little. The Prince for all practical purposes told the King that, “She won’t take no more captain, we’re doing all she’ll stand.” Besides, the U.S. uses more oil per day, than the entire nation of Saudi Arabia produces!
My opinion is that nothing short of a world recession could significantly lower the price of crude. And, should there actually be a deep world recession; the price of crude may be well down on your list of concerns.
What I’m saying is that the world is running out of oil and we have no plan “B” for that coming event. As the imbalance in supply and demand increases…well lets say affordability will become an issue of great concern to motor home drivers.
Not being able to afford oil, is the same as not having oil. And, that will be the fate of many Americans, which fate will follow the standard practice of rising from the bottom up. When our poorest people can’t afford fuel for a motor scooter, our more affluent will be taking shorter trips to Europe on their private jets.