Crude and Gas Prices, Global Economic Change

Its funny what travel will do for you, it may even make you cynical. As i travel all over the USA i see a huge fluctuation in the price of gas at the pump.... in many cases in excess of a dollar. Los Angeles always seems to trump at the pumps, even beating Hawaii which to my knowledge has no indigenous supply and therefore must be importing its gas from overseas.

What does all this lead me to speculate? What does my cynicism indicate.....

I think that the oil and gas companies know that with more efficient cars, alternative fuels and other such measures demand and consumption will decline, therefore they are gouging profits now to ensure their future.... The Gulf Nations know that their liquid gold is disappearing and that they have to make everything they can, capitalizing on a weak dollar and decoupling to further enhance their wealth.

Meanwhile the US governments continued investment in foreign policy that has huge financial burden and limited recompense further enhance cost and distention within the oil producing world. Expect that heating gas/oil/ electric etc rise significantly next winter creating further pressure on the already lackluster housing market as well as a sweltering summer and increased air conditioning hurting this summer in the southern states. (This will also become a major factor affecting the commercial real estate markets and causing more of a downturn, along with added market pressure.)

Ultimately how can the US deny we are entering a recession or more likely a depression, all the smart money is heading to China which now benefits from a burgeoning internal market. Look for the Yuan to decouple from the dollar after the Olympics further shaking the global market place, stocks and commodity prices.


Copyright Jonathan Rose 2007 - Creative Commons License





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