$150 a Barrel of Oil

Another doomsday report from southern Oregon, but first... BE HAPPY. Spend your stimulus check.. no better not. When it makes no difference to the economy at all, you might find it depressing to think of the billions the American people have been swindled, while your cut was a mere few hundred dollars.

Yes, I've been watching the news today. Some of it is almost humorous, if not tragic. Ford Excusions, Chevy Suburbans, BIG trucks, SUVs, all of those $40 - 60k vehicles aren't worth 30% of their original cost less than two years after they're purchased. People trying to trade them in due to the gas crisis (again, circa 1976) are finding they have no re-sale value due to the cost of gas. What? You don't have $240 to fill the tank on your 3\4 ton that gets ten miles to the gallon? No matter, it'll still look good with those 22" rims. Hey... and if the asphalt gets so hot your tires stick to the pavement and two wheel drives can't move, you got four wheel drive, just no gas!

I mean, what the hell did you expect? People out there living in $500 a month apartments, driving SUVs with $600 a month payments, plus insurance (maybe) and gas too. Then there's the homeowner who refinanced and bought that car. Now he's upside down in his house. Then he tries to cut expenses, dump the gas hog, and what happens? He's upside down in the SUV, or already lost $20-30k.

Uh-oh, it's the spiral effect and it's snowballing.

I'm poor, so we must keep in mind my views are from one who views gas prices as devastating to people on fixed and lower incomes.

However, why would anybody want to buy a new car today? Motor home? Hell, at this point anything that burns gas is a bad investment. Soon fuel costs for private transportation will become prohibitive. Which brings us to $150 a barrel oil prices. It was only two months ago that oil hit a previously un-thought of $100 a barrel. At that time gas was over $3 a gallon.

Today it's at $130+ a barrel, and at the current rates of increase it should be $150 by the end of June. As I stated before (All Things Being Equal 05 MAY 08), the price of gas will be $5.25 a gallon by the end of summer and, unfortunately, everything else is going to be 35% more expensive too.

Now here's the back breaker; while everything else becomes more expensive (and the dollar loses value), your house, which is your hedge against inflation, loses value too! Coming and going, Baby, coming and going.

Anyway, don't get me wrong, I'm not worried. Misery loves company and I'm lonely as hell, and I've already downscaled. It ain't all bad. There are unprecedented opportunities in the decline, also. One only need know where to look. I'm looking to the garden.