It never ceases to amaze me about how many people believe that the price of oil is dictated by "evil" oil companies. Nobody complained about the oil companies when a barrel of oil was $18.
The simple fact of the matter is supply and demand. There was a time that the US and Europe were the main importers of oil in the world. Now, India, China and third world countries are seeing an explosion of residents with cars as the quality of life improves in those places. They deserve to own cars just like us Americans, no?
The problem lies in the fact that China and India have a BILLION plus citizens each with a growing energy demand much like one we experienced in the US through the 50's until now. As time goes on, the crude demand will only increase, thereby sending prices north as well.
If you prescribe to the "peak oil theory" as some experts do (that we have reached the tipping point where underground oil is a finite commodity and we are past the point of being able to increase production), the issue becomes more acute.
So blaming oil companies, the US governments wars, the arabs etc... is silly. As demand skyrockets with each passing year, prices will continue upward unless somehow supply can be substantially increased. The only answer is to find an alternative.
And that doesn't happen until the pain becomes too great to bear and the economics are overwhelmingly in favor of commodity replacement (hydrogen, electricity, solar, nuclear, etc.... Hopefully, we'll get there sooner than later. But in the meantime, other countries have been paying $4 for a gallon of gas for many years. This was bound to happen sooner or later.
If we still heated our houses with wood, the US probably would have seen its last tree 60+ years ago. Until we transition to a new form of energy, the pain will continue ONLY due to the increased demand, NOT some great Satan!
It is what it is, just simple math. As far as other economic issues in the US, there is a normal up and down business cycle. Unfortunately, Americans and the government are unwilling and refusing to allow our economy to experience the downside by tampering with the rules of the game. The Fed refuses to allow the economy to cool and now is in dangerous waters printing money like mad and bailing out banks instead of letting the ones making crazy bets to fail. Americans and our government continues to spend and spend with no thought of the future.
Ten years ago the US made a real push to get Americans into their own homes. It was a noble idea. The banks were more than happy to comply to this edict. So happy, in fact that they lost all sense of fiscal restraint. As the demand for homes reached a fever pitch, of course the price of homes crazily followed. As the home prices went nuts, many buying them simply really couldn't afford them. This didn't bother them, nor the banks (nor the federal government for that matter. Everyone was living the American dream and their homes were actually even becoming nest eggs!!!!
Until the business cycle turns and demand dries up. Baby boomers looking to sell their homes and cash in on nest eggs. People flipping homes like some mad game of musical chairs. And this is where it ends. The banks are in shambles and the government is trying it's best to diffuse a bomb.
The longer they delay the inevitable, the worse it will finally be. It's time to pay the piper. Tighten our belts and weather the down cycle. It doesn't have to be a depression, but it will be if we keep delaying it. And it doesn't matter whether the politicians are republican or democrats. Both parties are doing their damndest to muck this thing up. even though I am a conservative Republican it makes me mad to see BOTH parties use us against each other to push their own broken agendas. They promise the sun and the moon and deliver usually nothing good.
Sorry this was so long. This stuff is my life now.
