Post by: ssn vet on May 22, 2008, 06:23:58 AM
Both my wife and I drive as little as possible, yet we burn ~25 gal./week total in our gas tanks.....@~$3.70/ga. ---> ~$4,800/year
and that's pushing ~14% of my NET income (after they lop out ~$1,000/mo. for health insurance)
Now here's the catch....
It's looking VERY LIKELY that gas is going to go up to $5.00/gal. by fall of '08.
That's going to tack on another ~$1,700/year just to pay for gas.
LPG will probably go up ~10%, so that's another $240
Then there's FOOD!!!
Milk and eggs and everything else is going through the roof!
From what I'm reading.....food prices are going to DOUBLE in the next year or two! And I'm feeding a family of 5 with 3 of them in the growing years!!
-----------------------
So here's where I'm going with this....
I'm thinking that TEOTWAWKI is going to look differently than the typical internet scenarios....
I'm beginning to think it's going to look more like.......
1. U.S. loses it's status as an economic power house.
2. U.S. economic interests overseas are supplanted by foreign economic and political entities.
3. The dollar keeps falling.
4. Consumer spending will not be able to pull the country out of the economic slump (recession?), because every spare dime will be spent at the gas pump, heating/cooling houses and feeding the kids.
5. The ever growing chasm between the haves and have not's is going to turn into a HUGE GULf.
6. The federal government is going to go nuts with social spending.
7. The ugly bills from the Iraq and Afghan. wars, the IOU from the social security trust fund, which we've been avoiding for so long, are going to come due.
8. The U.S. will cease to be the preferred place for investment for foreign corporations and governments.
9. The Feds going to try to combat inflation the only way they know, with the only tool they have.....increasing interest rates.
10. The raising cost of capital will effectively kill the housing market on a long term basis.
11. Stagflation will rule the day.
12. Obama will do the only thing that Democrats know how to do, massive social give aways and massive tax increases for the "wealthy" (defined as anyone who makes >$40,000).
13. To pay for all this, the politicians will do what they always do, borrow more and print more money, which will result in HYPER INFLATION....especially affecting the necessities (food, fuel & health care). The cost of a bag of groceries and a tank of gas will exceed that of a hot rod computer.
14. Local governments will be crippled by the loss of income and sales tax revenue along with the increased cost of providing essential services and will raise property taxes like you've never seen.
14. People who's living expenses exceed 50% of their income, along with most all of the AARP types living on limited savings and pensions, will be bit the hardest, as they can't afford to pay their property taxes, heat their homes, pay medical bills and eat.
15. Foreclosures and tax default seizures will make the current "crisis" seem like the good ol' days.
16. As a new peasant class grows ever larger, state agencies providing services will be overwhelmed and eventually, as they tally up larger and larger percentages of strapped state budgets, will be shut down.
17. As the Feds look to tax the big corporations to bail out the social services crisis, the flight of industry from the U.S. will accelerate. Chrysler, G.M. and Ford will go bankrupt (in that order) as China gets fully developed in auto manufacturing. Unemployment will raise to >20% with it's predictable affect on government tax revenues and demand for government welfare.
18. As social unrest brews and bubbles over in the U.S., real power will shift to where the money is....international corporate conglomerates & organized crime.
19, Wealthy people will take flight from the U.S. with a new immigration trend, further stripping the country of dollars.
Then the fun begins....collapse of government authority...organization of the surfs into tribal systems....Latinos, blacks, Italians, Irish, Asians, whites (the same ol' ethnic and racial divides).
Then just to really muddy the waters...
Iran will finish their nuke, give it to Hezbollah and they'll lob it at Tel Aviv the next day. The western powers WILL NOT RESPOND in any meaningful way. The next (and final) Arab-Israeli war will go full tilt, with Israel supernaturally kicking everyone's tail, just like they've done in the past. A lot of sand will get turned to glass in the middle east. The production of oil from the middle east will slam to a halt.
North Korea will take note of how INEPT the west has become and as they have their bi-annual economic collapse, with up the anti in their extortion game. South Korea and Japan will be totally involved in dealing with this.
Global power will shift to where the money is....
Russia (banking $$$ as they pipe natural gas to Europe)
China (banking $$$ as they become the worlds manufacturer of everything)
Persia (will set up a puppet Shia government in Iraq, snap up Kuwait in the vacuum of U.S. global influence and breathe hard down the necks of the Arabs).
Global power will shift away from....
The U.S. (see reasons above)
Europe (economic melt down and Jihad will Balkanize France and Germany)
......
O.K. stop and breath....this is to much fun....
.......
Now...
discussion....
What course should the U.S. take to head this off?
and my real question....
What course should middle class families take to survive in this economic TEOTWAWKI scenario?
Post by: wmenorr67 on May 22, 2008, 06:29:32 AM
Plus the market in China is eventually going to top out as the continue to "modernize." There is some speculation that after the Olympics things in China will peter out and return to "normal."
Post by: Scout26 on May 22, 2008, 06:32:40 AM
Post by: charby on May 22, 2008, 06:34:29 AM
Quote
High gas prices drive farmer to switch to mules
MCMINNVILLE, Tenn. (AP) - High gas prices have driven a Warren County farmer and his sons to hitch a tractor rake to a pair of mules to gather hay from their fields. T.R. Raymond bought Dolly and Molly at the Dixon mule sale last year. Son Danny Raymond trained them and also modified the tractor rake so the mules could pull it.
T.R. Raymond says the mules are slower than a petroleum-powered tractor, but there are benefits.
"This fuel's so high, you can't afford it," he said. "We can feed these mules cheaper than we can buy fuel. That's the truth."
And Danny Raymond says he just likes using the mules around the farm.
"We've been using them quite a bit," he said.
Brother Robert Raymond added, "It's the way of the future."
MCMINNVILLE, Tenn. (AP) - High gas prices have driven a Warren County farmer and his sons to hitch a tractor rake to a pair of mules to gather hay from their fields. T.R. Raymond bought Dolly and Molly at the Dixon mule sale last year. Son Danny Raymond trained them and also modified the tractor rake so the mules could pull it.
T.R. Raymond says the mules are slower than a petroleum-powered tractor, but there are benefits.
"This fuel's so high, you can't afford it," he said. "We can feed these mules cheaper than we can buy fuel. That's the truth."
And Danny Raymond says he just likes using the mules around the farm.
"We've been using them quite a bit," he said.
Brother Robert Raymond added, "It's the way of the future."
I learned how to hitch and drive horses a few years ago, I'm set for Tiki Wiki to happen!
Post by: MicroBalrog on May 22, 2008, 06:35:38 AM
Quote
The next (and final) Arab-Israeli war will go full tilt, with Israel supernaturally kicking everyone's tail, just like they've done in the past.
Ahahaha!
Sorry.
In 1973, Israel won because America saved us.
In 1982, Israel *lost*.
In the last war, Israel screwed up epically.
The IDF is just not as it used to be.
Post by: Ben on May 22, 2008, 06:38:55 AM
Quote
There is some speculation that after the Olympics things in China will peter out and return to "normal."
Yup, besides the speculation stuff going on, China is going nuts with the diesel stockpiling for their power plants right now to ensure they don't look bad during the Olympics. It'll be interesting to watch the market the couple of months following the Olympics.
Post by: Tallpine on May 22, 2008, 06:44:08 AM
Quote
What course should the U.S. take to head this off?
I should think that would be obvious, but I won't say it
Quote
What course should middle class families take to survive in this economic TEOTWAWKI scenario?
I've been pondering this very thing myself, and don't have a good answer. The people who are going to come through this the best are the Amish and the Hutterites.
Maybe max out your credit card to stockpile food at current prices ...?
Post by: wmenorr67 on May 22, 2008, 06:53:42 AM
We need to start a War For Oil. Oh, wait a minute, we are in one now. Oh, wait a minute, are we?
Post by: Nick1911 on May 22, 2008, 06:54:13 AM
Post by: Manedwolf on May 22, 2008, 06:56:34 AM
Not going down to the Big E gunshow in Springfield this year because it's 119 miles away. Just too expensive for gas, when I might not find any good deals anyway.
Post by: Tallpine on May 22, 2008, 07:05:53 AM
Quote
Personal conservation. Drive what you have to for commuting, but drive less otherwise.
But then you won't be going to Stuff-Mart every day to spend money and our economy will crash
Why do you "hate America" ?
Post by: mtnbkr on May 22, 2008, 07:08:27 AM
Quote
Personal conservation. Drive what you have to for commuting, but drive less otherwise.
But then you won't be going to Stuff-Mart every day to spend money and our economy will crash
Why do you "hate America" ?
My stuff-mart is within biking distance.
Biking to stuff-mart...does that mean I like America because I'm shopping or hate America because I'm riding a bike instead of driving a car? I'm confused.
Chris
Post by: charby on May 22, 2008, 07:17:49 AM
Quote
Personal conservation. Drive what you have to for commuting, but drive less otherwise.
But then you won't be going to Stuff-Mart every day to spend money and our economy will crash
Why do you "hate America" ?
My stuff-mart is within biking distance.
Biking to stuff-mart...does that mean I like America because I'm shopping or hate America because I'm riding a bike instead of driving a car? I'm confused.
Chris
Check out my new ride at Wally World
On my way to a fishing trip
Post by: Werewolf on May 22, 2008, 07:46:34 AM
GET OFF THE GRID:
1. Acquire 30 to 40 acres in the boonies
2. Build an underground or semi-underground house on same.
3. Dig a well. Use a windmill to pump water backed up with a small electric pump powered by 5.
4. Power all with a wind turbine and solar
5. Learn to can various food stuffs
6. Start growing various food stuffs and can same
7. Set up a blacksmith shop
8. Learn blacksmithing skills like how to make various metal tools, horse shoes, nails, saws etc
9. Start making same
10. Stock up on metal stocks
11. Acquire breeding stock of chickens, pigs, cows, horses etc
12. Breed same as domestic work animals and food
13. Get guns
14. Get plenty of ammo and stuff to reload said ammo
15. Practice with guns and ammo
16. Develop defense plan for when civ collapses because everyone and his brother will be wanting what you've got
17. Practice plan
18. Plan for said plan to fail and have a backup plan
19. Practice backup plan
Finally - when civilization collapses - well - that's another story entirely...
Post by: AZRedhawk44 on May 22, 2008, 08:23:56 AM
Pick up one item a month if you can afford it... A solar panel one month, a charge controller next, a DC-AC inverter next, deep cycle battery next. Add solar panels and batteries until you reach peak AC wattage on your AC inverter or max out your charge controller's capabilities, then split the system in half and distribute it to different loads in your home. Run the solar-AC system on separate electrical lines to avoid bridging your city-supplied system and your own system. Once you can safely produce a solid 1000 Watts an hour during sunlight, store around 12,000 watt-hours in your battery well and can subsist your house 24-hours at ~500 watts (or some similar ratio), either bridge the system or go off-grid.
Or conversely, if it's windy where you live, do the same thing with wind turbines.
See what it takes to get 10% off grid, and do it. Even if you just run your fridge to begin with. Eventually you can get more of your house off-grid.
Post by: taurusowner on May 22, 2008, 08:24:24 AM
Post by: Balog on May 22, 2008, 08:29:18 AM
Post by: 280plus on May 22, 2008, 09:37:39 AM
I'll tell you one thing, I turned in a furnace at the scrapyard the other day and got $1.98/lb for it so if you're the ambitious type I'd start collecting all this junk steel I see around no matter where I go in the US and cash it in. A smart operator could put together a pretty good living doing that, while the prices are elevated anyways. I mean, I can't remember exactly where I saw it but it seemed like I kept coming across acres and acres of abandoned cars, trucks and equipment. That's a lotta dough just sitting there. Now I'm thinking maybe upstate NY headed towards Seneca was where I saw this. I was in awe.
Post by: Manedwolf on May 22, 2008, 09:44:29 AM
I'll tell you one thing, I turned in a furnace at the scrapyard the other day and got $1.98/lb for it so if you're the ambitious type I'd start collecting all this junk steel I see around no matter where I go in the US and cash it in. A smart operator could put together a pretty good living doing that, while the prices are elevated anyways. I mean, I can't remember exactly where I saw it but it seemed like I kept coming across acres and acres of abandoned cars, trucks and equipment. That's a lotta dough just sitting there. Now I'm thinking maybe upstate NY headed towards Seneca was where I saw this. I was in awe.
Thieves are finding it easier to steal the $200+ catalytic converters off cars and the copper pipes out of unsold houses, unfortunately.
Post by: Gewehr98 on May 22, 2008, 09:50:53 AM
Then it will only postpone the inevitable as it, too, trickles out - peak oil is here.
We've been using foreign petroleum to conserve our own reserves, IMHO. Now those foreigners aren't so generous, and China is only growing in their thirst.
In the meantime, crude is heading towards $200/barrel, and $5.00/gallon or worse isn't such a stretch, even for the naysayers.
That's regardless of whether it's supply and demand, speculative market purchases, hoarding, people filling up more often to avoid the next day's price increase, or whatever.
Memorial Day weekend's upon us, and it's gonna be $4.00/gallon, period.
I see one of the biggest Ford dealerships in SoCal, Family Ford of Rancho Santa Margarita, is now tango-uniform because they couldn't pay Ford for their sitting inventory. I'll file that right next to the Janesville Suburban/Tahoe plant laying off people, as a sign of the times.
I've got about 25% of the home off-grid with solar electric right now. I'm working hard to get the rest converted.
Post by: The Annoyed Man on May 22, 2008, 09:52:45 AM
Post by: El Tejon on May 22, 2008, 09:55:26 AM
I think once people have to choose between eating and staying warm and paying taxes that we may see the scenario come to pass.
They laugh at me around here for stockpiling food and ammo. I reply, "buy it cheap, stack it deep."
Post by: 280plus on May 22, 2008, 09:59:42 AM
Quote
I see one of the biggest Ford dealerships in SoCal, Family Ford of Rancho Santa Margarita, is now tango-uniform because they couldn't pay Ford for their sitting inventory. I'll file that right next to the Janesville Suburban/Tahoe plant laying off people, as a sign of the times.
I was just talking to my brother the Ford mechanic about this. I was on the lot and there ain't no cars. Why? Because rather than pay the lot cost on the inventory they've sold it off and not replaced it.
Post by: ilbob on May 22, 2008, 10:06:26 AM
The undrilled oil in U.S. territories will take a decade or more to recover and process.
Or not. The oil fields in the Dakotas may well contain more oil than Saudi Arabia ever had, and is quite profitable to recover at $20 a bbl.At $30-40 a bbl, it is profitable to convert our almost unlimited supplies of coal to oil.
Oil sand deposits are another place where higher prices make recovery very feasible.
The real bottleneck is refining capacity.
Guess who is the real culprit???
Post by: 280plus on May 22, 2008, 10:07:21 AM
Post by: StopTheGrays on May 22, 2008, 10:23:10 AM
The undrilled oil in U.S. territories will take a decade or more to recover and process.
Or not. The oil fields in the Dakotas may well contain more oil than Saudi Arabia ever had, and is quite profitable to recover at $20 a bbl.At $30-40 a bbl, it is profitable to convert our almost unlimited supplies of coal to oil.
Oil sand deposits are another place where higher prices make recovery very feasible.
The real bottleneck is refining capacity.
Guess who is the real culprit???
Post by: ssn vet on May 22, 2008, 10:27:37 AM
Got to get that stuff off of my chest every now and again.
My real point in connecting inflation to TEOTWAWKI, was because I think the future isn't going to be stockpiling ammo in bomb shelters....
But rather...
I think we could be looking at a prolonged recession that would change "the states as we know it". And that many (most?) of us could be reduced economically to the Walton's squeeking by (if we're lucky) or homeless beggers (if we're not).
Fortunately, we have 5.5 acres in a fairly rural setting. We could do a serious garden. Can cut wood off ours and neighbors land.
We have only two debts....our house and one vehicle.
I have a decent and secure job as an engineer at a company that historically does well during economic hard times. But it won't keep up with inflation.
Wo I predict our standard of living dropping significantly in the next five years.
Quote
The people who are going to come through this the best are the Amish and the Hutterites.
that's a huge insight.
they have three things really going for them...
1. they've avoided debt to secular institutions
2. they live off the land independant of many of societies intitutions
3. they live in a close knit commuity with both it's own sub-economy and strong ethical norms.
.......
Hmmmm!
time to start a commune?
Post by: Manedwolf on May 22, 2008, 10:28:01 AM
Post by: The Annoyed Man on May 22, 2008, 10:28:23 AM
Quote
Or not. The oil fields in the Dakotas may well contain more oil than Saudi Arabia ever had, and is quite profitable to recover at $20 a bbl.
At $30-40 a bbl, it is profitable to convert our almost unlimited supplies of coal to oil.
Oil sand deposits are another place where higher prices make recovery very feasible.
The real bottleneck is refining capacity.
Guess who is the real culprit???
At $30-40 a bbl, it is profitable to convert our almost unlimited supplies of coal to oil.
Oil sand deposits are another place where higher prices make recovery very feasible.
The real bottleneck is refining capacity.
Guess who is the real culprit???
Except none of that will happen lest it cut into Big Oil's record profits.
Post by: Manedwolf on May 22, 2008, 10:29:55 AM
Quote
Or not. The oil fields in the Dakotas may well contain more oil than Saudi Arabia ever had, and is quite profitable to recover at $20 a bbl.
At $30-40 a bbl, it is profitable to convert our almost unlimited supplies of coal to oil.
Oil sand deposits are another place where higher prices make recovery very feasible.
The real bottleneck is refining capacity.
Guess who is the real culprit???
At $30-40 a bbl, it is profitable to convert our almost unlimited supplies of coal to oil.
Oil sand deposits are another place where higher prices make recovery very feasible.
The real bottleneck is refining capacity.
Guess who is the real culprit???
Except none of that will happen lest it cut into Big Oil's record profits.
Actually, they've tried to build new refineries numerous times, but the greenies file lawsuits and block them.
Post by: ssn vet on May 22, 2008, 10:33:08 AM
Quote
the most likely scenario for an insurrection in the USA would be a tax protest. I think once people have to choose between eating and staying warm and paying taxes that we may see the scenario come to pass.
Hmmm....initial stages may have started already....like our friendly neighborhood dentist here in NH.
Quote
FISTFUL
you're going to have to help me out with that one.Post by: The Annoyed Man on May 22, 2008, 10:35:20 AM
Quote
Actually, they've tried to build new refineries numerous times, but the greenies file lawsuits and block them.
I knew that was coming. The richest, most profitable companies in the history of the world are the victims of a few bearded treehuggers. Yeah right. That makes even less sense than Hitler blaming Jews for Germany's problems. Big Oil could build refineries if it wanted to. But why spend money that won't add to the bottom line? It's a bidness decision, pure and simple.
Post by: The Annoyed Man on May 22, 2008, 10:37:27 AM
Quote
Wo I predict our standard of living dropping significantly in the next five years.
The standard of living in this country has been dropping since the 80's and the 'trickle down economics' merger of corporations and government.
Post by: Manedwolf on May 22, 2008, 10:37:35 AM
Quote
Actually, they've tried to build new refineries numerous times, but the greenies file lawsuits and block them.
I knew that was coming. The richest, most profitable companies in the history of the world are the victims of a few bearded treehuggers. Yeah right. That makes even less sense than Hitler blaming Jews for Germany's problems. Big Oil could build refineries if it wanted to. But why spend money that won't add to the bottom line? It's a bidness decision, pure and simple.
Congratulations, you just Godwin'ed the thread.
Post by: The Annoyed Man on May 22, 2008, 10:39:15 AM
Post by: 280plus on May 22, 2008, 10:50:40 AM
Quote
FISTFUL!!
Huh? you're going to have to help me out with that one.
Ah, you're new here. Fistful (or maybe he's "Creepy Picture" today) is the board scapegoat. No matter what has gone wrong, is going wrong or will go wrong it's his fault. WWII? Fistful's fault,,,rising gas prices, yup, Fistful,,,Boss urinate on your cornflakes today? Fistful, again. get the picture? Huh? you're going to have to help me out with that one.
Post by: 280plus on May 22, 2008, 10:54:45 AM
I won't call you a bubble if you don't call me a target...
Post by: Tallpine on May 22, 2008, 11:03:39 AM
Quote
time to start a commune?
Only if it includes polygamy
The Amish will do all right. The "Hoots" might have a problem since they are heavily mechanized. The colonies usually have the biggest and newest tractors and combines of anyone around.
Post by: Gewehr98 on May 22, 2008, 02:18:54 PM
Quote
Actually, they've tried to build new refineries numerous times, but the greenies file lawsuits and block them.
Exactly. No new refineries built since the 1970s, and there are oodles of legislative hurdles to overcome, so I put a conservative 10 year estimate on when the consumer will see any sizable domestic oil increases worth writing home about.
BTW, Paddy, way to Godwin the thread!
Post by: The Annoyed Man on May 22, 2008, 03:55:06 PM
Quote
BTW, Paddy, way to Godwin the thread! undecided
I suggest you explore the meaning of 'Godwin'. No one said Big Oil are Nazis. Rather the logic of blaming a few hippies for high gas prices is as absurd as Jews being responsible for Germany's problems in the 1930's. Both make about as much sense. Which is none.
Post by: Harold Tuttle on May 22, 2008, 06:10:13 PM
Post by: RocketMan on May 22, 2008, 06:11:08 PM
Quote
Actually, they've tried to build new refineries numerous times, but the greenies file lawsuits and block them.
I knew that was coming. The richest, most profitable companies in the history of the world are the victims of a few bearded treehuggers. Yeah right. That makes even less sense than Hitler blaming Jews for Germany's problems. Big Oil could build refineries if it wanted to. But why spend money that won't add to the bottom line? It's a bidness decision, pure and simple.
Yes, the greenies do file suit and stop them. Like they do with many other things.
However, "Big Oil" has been expanding existing refineries all over the place because that is the only option open to them. Google that one, leave off the knee-jerk responses.
Post by: Gewehr98 on May 23, 2008, 09:14:03 AM
Exxon told shareholders recently that it has no plans whatsoever to boost production through at least 2012:
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=BWK&date=20080323&id=8373065
Post by: Headless Thompson Gunner on May 23, 2008, 12:03:42 PM
The problem is that while those operations are coming online, their older operations are declining. They expect rapid declines in production from their American and European sources. The declines offset the the new production, resulting in no net expansion.
Golly, I wonder why Exxon can't increase, or even just maintain, its domestic oil production...?
Post by: Nick1911 on May 23, 2008, 12:47:12 PM
Golly, I wonder why Exxon can't increase, or even just maintain, its domestic oil production...?
There's two sides to every story. I don't think Exxon is a big evil company hell-bent on "screwing the proletariat."
At the same time, what would they (OPEC, Exxon) have to gain by increasing production? Fuel doesn't appear to be elastic - if you need gas to get to work in the morning, you'll buy gas at $3.00, $4.00, $7.00. A lot of people and industry can't simply "stop driving".
Post by: Gewehr98 on May 23, 2008, 01:12:37 PM
Some analysts predict Exxon is more focused on buying out their public shares, with the ultimate goal of going private or even turning into a trust and disappearing.
http://articles.moneycentral.msn.com/Investing/JubaksJournal/IsExxonMobilsFutureRunningDry.aspx
Post by: lupinus on May 23, 2008, 02:08:45 PM
Quote
you're going to have to help me out with that one.
There are two rules of APSYou do not talk about APS
It is fisfuls fault
And Paddy-
It's not "a few hippies" some of the richest people in this country are lefty pinko nutjobs *cough*soros*cough*
With the environment crazy political environment we live in new refineries are demonized, and getting one built is expensive and extremely hard to do. I can't fault anyone, corporation or otherwise, for not taking it up the ass to build one while the situation is as it is.
Post by: Balog on May 23, 2008, 02:50:17 PM
Post by: taurusowner on May 23, 2008, 02:52:55 PM
Funny, that.
Exxon told shareholders recently that it has no plans whatsoever to boost production through at least 2012:
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=BWK&date=20080323&id=8373065
Exxon told shareholders recently that it has no plans whatsoever to boost production through at least 2012:
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=BWK&date=20080323&id=8373065
It's hard to have plans to do something illegal.
Post by: The Annoyed Man on May 23, 2008, 04:04:06 PM
Quote
The next (and final) Arab-Israeli war will go full tilt, with Israel supernaturally kicking everyone's tail, just like they've done in the past.
Ahahaha!
Sorry.
In 1973, Israel won because America saved us.
In 1982, Israel *lost*.
In the last war, Israel screwed up epically.
The IDF is just not as it used to be.
I blame the discos that became prevalent in Tel Aviv in the 70's and 80's.
Post by: LAK on May 24, 2008, 03:47:11 AM
Business & Media Institute
5/21/2008 3:38:13 PM
It may be the mother of all doom and gloom gas price predictions: $12 for a gallon of gas is inevitable.
Robert Hirsch, Management Information Services Senior Energy Advisor, gave a dire warning about the potential future of gas prices on CNBCs May 20 Squawk Box . He told host Becky Quick there was no single thing that would solve the problem, due to the enormity of the problem.
[T]he prices that were paying at the pump today are, I think, going to be the good old days, because others who watch this very closely forecast that were going to be hitting $12 and $15 per gallon, Hirsch said. And then, after that, when oil world oil production goes into decline, were going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, were not going to be able to get the fuel when we want it.
Hirsch told the Business & Media Institute the $12-$15 a gallon wasnt his prediction, but that he was citing Charles T. Maxwell, described as the Dean of Oil Analysts and the senior energy analyst at Weeden & Co. Still, Hirsch admitted the high price was inevitable in his view.
I dont attempt to predict oil prices because its been impossible in the past, Hirsch said in an e-mail. Were into a new era now, and over the next roughly five years the trend will be up significantly. However, there may be dips and bumps that no one can forecast; I wouldnt be at all surprised. To me the multi-year upswing is inevitable.
Maxwells original $12-15-a-gallon prediction came in a February 5 interview with Energytechstocks.com, a Web site run by two former Wall Street Journal staffers.
[Maxwell] expects an oil-induced financial crisis to start somewhere in the 2010 to 2015 timeframe, Energytechstocks.com reported. He said that, unlike the recession the U.S. appears to be in today, This will not be six months of hell and then we come out of it. Rather, Maxwell expects this financial crisis to last at least 10 or 12 years, as the world goes through a prolonged period of price-induced rationing (eg, oil up to $300 a barrel and U.S. pump prices up to $15 a gallon).
According to associate of Maxwell at Weeden & Co., Maxwell is out of the country and currently unavailable for comment.
Maxwells biography on the Weeden & Co. Web site said he has been ranked by the U.S. financial institutions as the No. 1 oil analyst for the years 1972, 1974, 1977 and 1981-1986, according to polls taken by Institutional Investor magazine.
In addition, for the last 17 years he has been an active member of an Oxford-based organization comprised of OPEC and other industry executives from 30 countries who meet twice a year to discuss trends within the energy industry.
Although Maxwells prediction is for the long-term, not everyone supports high-end predictions, even in the short-term. CNBC contributor and the vice president of risk management for MF Global (NYSE:MF) John Kilduff said on The Call May 7that he expected gas prices to drop following the Chinese Olympics, as Chinas economic boom slows down.
http://www.businessandmedia.org/printer/2008/20080521145247.aspx