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Edited on Fri Apr-27-07 02:37 PM by Javaman
The current popular thought is that most Americans don't save, borrow off there mortgages and are just one paycheck away from being homeless, while all that might be true, however there is something more worrisome out there that will eclipses those above.
We are being tested. No, not by God or some sort of supreme being per say, but by our gov't and the oil companies.
What is the test you ask? How far they can push us before we break.
The first test came right after Katrina, when oil prices spiked. Which in turn pushed the price up at the pump. That national average at that time was something on the order of $3.75 a gallon for regular and areas of the west cost were paying over $4.00 a gallon.
But what we also found out, not all that long later on, was that Exxon had recorded the largest profits ever recorded in one quarter in the history of the world.
How can they be making so much? we felt we had been had. The simple concept of supply and demand had been a sham. It appeared as if they were price gouging us. Want to know why?
Yes, peak oil exists and as much as Tillerman CEO of Exxon would like us to believe that he doesn't believe in it, he very much does. If he admits he does, the Exxon's stock plummets. And after a time, he's out of his chintzy job. Why admit something when you don't have to? Let marketing research do the dirty work for you.
So instead we as a nation are treated to a test.
With the conclusion of the last test, (Katrina) several things were discovered about our society.
1) as prices got higher, people drove less (no duh)
2) the sales of SUV's dropped
3) the sales of fuel efficient cars and hybrids went up.
but on the other hand, as prices went down;
1) people drove more
2) SUV sales went up
3) fuel efficient cars and hybrid sales went down.
Prior to Katrina, gas was at an average of, I believe, $1.50 nationwide. After-wards and after the spike then drop in gas prices, the average price was $2.20 nationwide.
People became accustomed to the new norm. 2+ dollars for a gallon of gas.
This whole reaction by the American population is what I like to call, "Whew, that was a close one", why? Because the belief that as high as the prices were when they finally settled, they were certainly lower than when they had spiked.
This is the equivalent of saying, "wow, although the bullet hit me, it only blew off my foot". Thanking ones lucky stars to still be alive.
The next time, this time, we might not be so lucky.
Like I said earlier, the oil companies and the gov't are completely aware of peak oil and are now conducting and elaborate experiment.
At what point does the price of oil/gas get so high that it becomes detrimental upon society.
We are currently riding a national average of $3.30 at the pump. Some areas are already nearing or above $4.00.
When the national average hits $4.00+, things become interesting.
The people who live out in the exurbs, both the middle class and the lower middle class will start experiencing hard choices that need to be made.
The poor of our society already lacking many skills to move up the food change will be hit first and the hardest. Unable to live near their jobs, and because of the overwhelming poor mass transit system in the U.S., they must drive to work. At some point as the price of gas goes up, it will be come a trip of diminishing returns.
On top of that, the price of food will go up, as will as clothing.
The next that will be hit will be the middle class. Most of which is occupied by people who could just about afford to buy a home, but one located way out in the middle of nowhere in the exurbs, will also have few choices in the way of getting to work and will have to tighten the belt to stretch what gas they can buy to make the daily commute.
And as always, the upper middle class and the rich will feel the pinch at the pump less but however feel it in a much different way.
The cost of services. The lower class that usually provides the labor for those services will have to charge more to cover their traveling cost. The upper middle class becomes the new middle class.
All of society takes a step down the rung.
As the effect of the rise in the price of gas begins to hit the economy, that's when you will see the price back off. It will drop down to a national average of roughly $3.00 a gallon and once again the U.S. population will groan and sigh with a resounding, "whew, that was close" once again.
However, this time while they are thanking their lucky stars, they will not have lost a foot, but one of their legs will be gone.
And this time they will remark, "well, I still have my other leg."
Up and up the price will go once again. Boiling the frog, cooking the goose, whatever you want to call it. It's still a death by a thousand cuts.
I choose to see it in a different way. I look at it as a way to ease us into a permanent depression. Where people muddle along, not complaining, not wanting, just grinning and bearing it. Unlike the crash of 29, where people demanded action, unions, standard work hours, good pay, social security, etc, and got it from a responsible government.
This time, the population, us, we, me, will just plod along, a portion of us will protest, but the economy, at least psychologically, is set up in such a way that people want more and more stuff and as long as the government can maintain that vail of normalcy, aka cheap crap at Wal-mart, nothing will change.
Perhaps this is the master plan to ease us off of fossil fuels, I would believe that if more fuel efficient cars were available or if an electric car was introduced or the rail system got a huge bump from the government, etc. But none of those things are happening, what is happening, as always through out the history of the world, the have mores are wanting even more at the expense of the have even-less.
Welcome to the future, where the race is not to win per say, but the last person to have the last tank of gas.
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