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Cadillac Maniac
Cadillac Escalade
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When oil is $100.00 a barrel and gas costs $6.00 a gallon. It's coming soon. Right? I've been hearing this for a long time and I believe we're going to see $6.00 a gallon in our immediate future. The price of just about everything is going to go way up. Correct? I fear that there will only be two classes. Rich and poor.. No more middle class, upper middle class - or any of that. This means that I will be poor.

I can imagine a time, coming soon, where we can forget about flying in planes because of gas. Food will cost a lot more because of shipping costs and packaging costs (oil is needed to make plastic, etcetera). Homes heated with oil? Forget about it.

What's going to happen?
 

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Watching the Watchers
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5,959 Posts
supply and demand will eventually equalize. As strange as it sounds, OPEC does not want high gas prices like this. the longer it stays high, the more likely there is to be a sea change in consumer use of oil, which can hurt their bottom line. there is also rampant sepculation in the market going on right now, plus our already feeble lack of refining ability has been weakened even more. My take is, look for gas around $2.25 a year from now, but we may never see under $2 levels again.

Short term, because of Katrina could be rough
 

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01 frontier , 89 Shelby CSX vnt
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im more concerned with the effect this short term spike will have on the economy and how hard we slide into resession , and what that will do to investment ,employment and all the things that keep us going ...

Im also curious what happens to the houseing boom as building supplys that are still pretty tight due to china and iraq construction are even more needed as New New Orleans builds ....it cant be good for people like brett ....let alone people like me who will be home shopping in a year ....tho it looks like the feds holding off on interest rate hikes
 

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JimmyH
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guess ill just have to bend over spread my cheeks and let them get it all the way in. i got to have my car to get back and forth to work so i dont have much choice. as bad as it sound 2.25 a gallon sound wonderful right now. i think i payed like 3.25 a gallon the other day. i told the clerk that their pump was messed up. the bottom numbers were going to slow and the top ones were going to fast. we actually had a guy with 2 55 gallon drums the other night filling them up. they shut the pumps off and told the guy he couldnt buy that much and he went off and they called the cops. the guy ran up to the hospital and i ended up fighting with the jerk... over f*ckin gas!
 

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Cadillac
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16,105 Posts
Howdy guys. Ralph's cousin Mark here; I've commented a once before, and I just had a conversation with Ralph about this very subject, so he thought I should add some ideas here. I've been doing some historical research on the petroleum industry (and I used to be an Economics dude).

Anyway, I was discussing the petroleum situation with a Royal Dutch Shell executive in Calgary. Shell's projections for a yearly crude high suggest oil might hit $130 per barrel, which is US terms would mean just below $4.00 a gallon. An extreme projection would be $180 per barrel - if factors conspired to produce a superspike.

The good news is that new refineries should be on line in Russia and Alberta in the coming year, which along with a probable decline in speculation means crude prices should level out at about $55-60 per barrell in 2006/2007. But he figured it wouldn't go down any lower than that.

Historically, if you look at the 1970s and early '80s, when oil prices were higher, relatively-speaking, than now, the immediate effect was inflation, unfortunately combined with economic stagnation (which old Jimmy Carter had to deal with). Oil is an "inelastic good": there is virtually no substitute, so consumers (esp. plastics companies and airlines) HAVE to buy it. So 25 years ago this led to the gigantic interest rate rises under Reagan.

We got out of that one when OPEC members started bickering and overpumped their quotas, leading to $11 per barrel prices in 1985. The difference now is that demand is much, much higher, thanks to the exploding economies of India and China.

MAYBE oil will become too expensive for the Chinese and Indians and their economies will cool off, but that's unlikely.

The most likely scenario for us in North America is that we'll have an economic situation like Europe and Japan have had for the past few years. Expensive, high-cost living, but if the economy keeps growing you won't see serious problems. But ... that middle-class crunch Mr. Collaziano mentions could happen. Washington would seriously have to reexamine its social welfare programmes - higher taxes to prevent a social imbalance. There would be more poorer voters who could force the situation.

Of course, there are a lot of unknowns - if Hugo Chavez turns off the taps, if the House of Saud collapses in Saudi Arabia and there's anarchy, if China invades Taiwan (or Siberia) ... Then again: if oil prices go too high, ultimately, it makes synthetic petroleum (like the Germans toyed with in WWII) a more feasible proposition.
 

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Cadillac
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Sinister Angel said:
Indeed. Theft by majority! Hip hip horray!
You will likely have to pay more taxes because of this situation, (and due to the huge expense in Iraq, one BILLION per day) and we've been over how it is not "theft" and how taxation keeps your economy afloat. Call it what you want however..but it beats "social imbalance" by any means. You are so against ANY increased taxation, and we've been over how it will be necessary to maintain your standard of living in the U.S. as well.

Just remember Somalia, they don't pay ANY taxes.

If you want to keep a powerful military and have roads to maintain your jobs, you're going to have to dish out some taxes, that's how it works. I shouldn't have to go over this again.
 

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'98 Buick Regal LS - '91 Caddy Seville - '87 Caddy Seville!
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"Soylent green is made out of people!" Soylent Green, 1973.

This would not only solve any food shortages in the future, but would be a form of population controll. With less people, there will be less demand for gasoline, therefore causing the prices of crude oil to drop.
 
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