How America Will Fall

If you don’t think we’re headed toward recession right now just wait – it’s going to get a lot worse. There’s 2 very critical economic effects happening right now that will ultimately topple the American economy: Gas and milk prices are rising.

Here’s how it works: If oil hits $200/barrel then it’s selling for $4.75/gallon by itself. That means gas prices will rise to about $7/gallon. At that price, going to work becomes unprofitable for many people. Most notably, truckers. A great deal of truckers are responsible for owning and gassing up their own rigs – and at $7/gallon it actually makes more sense for many to sit at home instead.

As gas rises and truckers cost more the prices of everyday goods goes up as well. Take a look at milk; it’s gone up faster than gas over the last 6 months. Milk prices aren’t just affected by transportation costs, they’re also affected by farming costs.

In our attempt to shift away from gas we’ve created a grain shortage. Less grains mean that animal food goes up which means that milk (and gasp! beer) goes up as well. Think I’m kidding? Bud Light has gone up an average of $0.75/pitcher in the last 6 months across the nation.

If you think that gas companies are gouging now, consider this: In the last 6 months the price of crude oil has gone up 76% – gas has only gone up 15%. Expect prices in the $6 – $7 range by the 4th of July weekend.

Hold on America, we’re in for a really bumpy ride this summer.

On a brighter note though, gas is going for $2.50/gallon right now in Mexico. It’s almost worth it to rent a tanker for a day trip.

6 comments May 26th, 2008