We can certainly expect the price of oil (or gasoline) to double within the next 3 years or so. The 1970's provide a good example of what happens to economies that are dependent on cheap oil when they get hit with sharp oil price rises.

You can certainly expect lots of inflation pressure (from rising oil prices and all the attendent products that are dependent on oil - food, plastics, chemicals, etc).

You can also expect sluggish GDP growth as the economy struggles with cost inflation and falling demand in manufacturing goods (which tends to cause job losses).

That is to say, we can expect a period of generally rising inflation and generally rising unemployment (and higher levels of debt-financing from governments). I'd also expect upward pressure on interest rates due to inflation (mostly running at 2.5-4% right now around the western world).

It is quite sad, to see this.

The US has very good conditions to be energy independent (better than europe in some respect) but there is a absolute lack of ambition.

Eventhough the technology is not always advanced enough, the idea that there is no renewable solution is totally bogus.

For example, Solar energy. When people think about solar energy they always think about photovoltaic panels... but Solar Thermal Power generation is possible and profitable since the 1980s.

Since the US has massive deserts, it would be possible to utilize these to produce enough energy to make the US energy independent.

All that would be neccessary is an ambition and a few hundret billion dollars.
But the US government and thereby the people of the US, seem not to see the point.

Well... I guess Fossil oil just has been too cheap since about 50 years...

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The problem with petroleum is that it is an inelastic commodity.
It takes a huge increase in price to make a small decrease in demand.
Gas has tripled in price in the last 8 years, but I probably use almost the same amount.
Because most of what I use is to get to work, I stopped joyriding a long time ago.
But the reverse is also true, if gas went back down to $1, I wouldn't drive much more than I do now.
So while we consumers feel the pain when gas goes up, the oil companies feel the pain when the price goes down.
So they employ legions of lobbyists to keep the government from making meaningful steps to reduce consumption or to reduce the price.
The government is still pumping millions of barrels of oil into the Strategic petroleum reserve.
A small amount of oil hitting the market, would create a significant price reduction, but all the oil the government collects in royalties stays off the market and goes into the ground.
Should we at least stop filling the reserve?

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“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

Yes, this has been raised many times - oil/gas prices are remarkably inelasitc.

Irrelevant. US government purchases for the US strategic reserve is only a tiny fraction of US demand for oil.

The entire US strategic reserve is only 1 billion barrels. US motorists consume 10,000,000 barrels per day. This whole strategic supply thus represents only a 100 day supply even if you drained it. A 100 day supply of oil for motorists in the USA represents about 3 weeks of world production. This is quite literally, a 'drop in the bucket'.

In other words, stopping purchases of oil for the US strategic reserve will do nothing to affect the price of oil or gasoline in the USA. Even dumping the whole reserve is unlikely to have much effect on the price at the pumps.

Yes, I agree it is very sad to see the USA abdicate any kind of leadership position on the issue and instead take the lead role in racing to the cliff edge.

I disagree, I think that given the inelastic nature of the oil market, and the fact that inventories are normal, a slight increase in available crude would translate into a decrease in price, and decreased profits for the oil companies, which is why the bought and paid for stooge of Big oil won't consider it.

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“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

I was thinking of collecting farts...who knows a whole summer full might heat my home in the winter...and keep those pesky salesman away to boot..

Why would you bother posting that? It wasn't even funny.

He didn't say they had to be His farts!

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Today's forecast: Government corruption.

Tomorrow's forecast: 100% chance of more 'politics as usual'

Maybe it's finally time to vote Libertarian