I think we now have another way to compute the countdown to the collapse of our society as we know it.
Several months ago I read on one of the economic web sites, we both visit, that for every penny the price of fuel goes up $1,400,000 per day is sucked out of the consumer economy.
With oil at $74 per barrel today and the PENAC people pushing for another Middle East war, this one with Iran, we are looking at oil reaching $125 per barrel or higher as soon as this dumb war starts. This translates to $5.25 - $6.00 per gallon fuel by October / November.
The media and the economists are now saying that we will have $4.00 per gallon fuel by June 1 on current oil prices. One of my trusted friends is telling me that fuel is already $3.90 per gallon is some rural California cities.
I believe that the true unemployed figure here in the US is more than 12%. And, that the underemployed figure is 6% to 10% With our millions of unemployed, increased fuel costs will dry up the economy before winter this year. That means the crash will come before the first of the year.
Just using the preceding figure of $1.4MM per day being sucked out of the consumer economy the numbers look something like this.
1 cent per gal increase = $1,400,000 per day.
50 cent per gal increase = $70,000,000 per day.
100 cent per gal increase = $140,000,000 per day.
150 cent per gal increase = $210,000,000 per day.
30 days at 150 cent per day increase = $6,300,000,000 . That number is six billion three hundred million dollars being sucked out of the consumer economy in 30 days ending June 30, 2006.
Granted there are all kind of formulas to compute the disastrous affects of such an increase and my math is simple and rough, however, the American people cannot withstand such a hit and survive as a nation.
Now look at the global effects of a war with Iran. The US purchases no oil from Iran. Most of Iran's oil is sold to Europe and other nations. A dumb nuclear strike or using depleted uranium ammo on Iran will contaminate that country for many lifetimes. Oil will trickle out of Iran just like oil from Iraq fluctuates. The price of oil will skyrocket as nations compete for available oil. The high price of fuel will curtail farming, food packaging, trucking, energy production, manufacturing, construction and the economy. The economies of many countries of the world will crash because the fiat dollar is the current primary global unit of International exchange. The Euro will crash a short time later because their central banks are tied to our central bank.
Yes, the crash can be put off for a little while by nationalizing the oil companies, major manufacturing, restricting travel, electrical use and subsidizing the farmers, but it will come regardless because you cannot build a nation on usury. Usury violates the 10th commandment and mocks God.
The lack of or the price of oil will soon bring our nation to a standstill, with or without another un Constitutional war. Civil unrest will surface and Americans will start taking out their frustrations on all foreign workers holding work visas, illegal border jumpers (the uncharged criminals living of America), the owners of businesses who hire foreigners, the banks that do business with them, foreign embassy consulates, the PACs, NGOs, churches, and the globalist in America. Under the guise of Homeland Security our anti American government employees will try to intervene and that will foster rebellion in various parts of the country. I am thankful I do not live in Texas, Arizona, New Mexico, Colorado, California or any sanctuary city. My brother and his entire extended family just moved to Idaho without any encouragement from me.
Now I am sure there are some economic professionals who visit this blog and can provide a better analysis than myself and I welcome their comments as to when we might expect the crash. I will go out on a limb and say, that absent government intervention it will probably come before the first of the year. Regardless, it is coming, and very soon.
Sincerely, - Rosy the Bull in Montana