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Did The Price Of Oil Help Cause The Financial Crisis Of 2008? Will Surging Oil Prices Soon Spark Another Financial Crisis?

Oil prices are starting to spin out of control once again.  In London, Brent North Sea crude for delivery in February hit 91.89 dollars a barrel on Friday.  New York crude moved above 88 dollars a barrel on Friday.  Many analysts believe that 100 dollar oil is a virtual certainty now.  In fact, many economists are convinced that oil is going to start moving well beyond the 100 dollar mark.  So what happened the last time oil went well above 100 dollars a barrel?  Oh, that's right, we had a major financial crisis.  Not that subprime mortgages, rampant corruption on Wall Street and out of control debt didn't play major roles in precipitating the financial crisis as well, but the truth is that most economists have not given the price of oil the proper credit for the role that it played in almost crashing the world economy.  In July 2008, the price of oil hit a record high of over $147 a barrel.  A couple months later all hell broke loose on world financial markets.  The truth is that having the price of oil that high created horrific imbalances in the global economy.  Fortunately the price of oil took a huge nosedive after hitting that record high, and it can be argued that lower oil prices helped stabilize the world economy.  So now that oil prices are on a relentless march upward again, what can we expect this time?

Well, what we can expect is more economic trouble.  The truth is that oil is the "blood" of our economy.  Without oil nothing moves and virtually no economic activity would take place.  Our entire economic system is based on the ability to cheaply and efficiently move people and products.  An increase in the price of oil puts inflationary pressure on virtually everything else in our society.  Without cheap oil, the entire game changes.

The chart below shows what the price of oil has done since 1950 (although it doesn't include the most recent data).  With the price of oil marching towards 100 dollars a barrel again, many people are wondering what this is going to mean for the U.S. economic "recovery"....


Just think about it.  What is it going to do to U.S. households when they have to start spending four, five or even six dollars on a gallon of gas?

What is it going to do to our trucking and shipping costs?

What is it going to do to the price of food?  According to the U.S. Bureau of Labor Statistics, food inflation in the United States was already 1 1/2 times higher than the overall rate of inflation during the past year.  But that is nothing compared to what is coming.

During 2010, the price of just about every major agricultural commodity has shot up dramatically.  These price increases are just starting to filter down to the consumer level.  So what is going to happen if oil shoots up to 100, 120 or even 150 dollars a barrel?

Demand for oil is only going to continue to increase.  Do you know who the number one consumer of energy on the globe is today?  For about a hundred years it was the United States, but now it is China.  Other emerging markets are starting to gobble up oil at a voracious pace as well.

Not that the price of oil isn't highly manipulated.  Of course it is.  The truth is that the price of oil should not be nearly as high as it currently is.  Unfortunately, you and I have very little say on the matter.

If the price of oil keep going higher, it is really going to start having a dramatic impact on global economic activity at some point.  Meanwhile, oil producers and the big global oil companies will pull in record profits, and radical "environmentalists" will love it because people will be forced to start using less oil.

When it comes to oil, there are a lot of "agendas" out there, and unfortunately it looks like the pendulum is swinging back towards those who have "agendas" that favor a very high price for oil.

So what does that mean for all of us?

It is going to mean higher prices at the pump, higher prices at the supermarket and higher prices for almost everything else that we buy.

If the price of oil causes a significant slowdown in economic activity, it could also mean that a whole bunch of us may lose our jobs.

In an article that I published yesterday entitled "Tipping Point: 25 Signs That The Coming Financial Collapse Is Now Closer Than Ever", I didn't even mention that price of oil.  There are just so many danger signs in the world economy right now that it is easy to overlook some of them.

Yes, it is time to start ringing the alarms.

The ratio of corporate insider stock selling to corporate insider stock buying is at the highest it has been in nearly four years.  This is so similar to what happened just prior to the last financial crisis.  The corporate insiders are seeing the writing on the wall and they are flocking for the exits.

Many savvy investors are getting out of paper and are looking for hard assets to put their money in.  For example, China is buying gold like there is no tomorrow.  The Chinese seem to sense that something is coming.  But of course they are not alone.  All over the world top economists are warning that we are flirting with disaster.

On Friday, Moody's slashed Ireland’s credit rating by five notches to Baa1, and is warning that even more downgrades may follow.

Just think about that for a moment.

Moody's didn't just downgrade Irish debt a little - what Moody's basically did was take out a big wooden mallet and pummel it into oblivion.

Irish debt is now considered little more than garbage in world financial markets now.  Unfortunately, Greece, Spain, Portugal, Italy, Belgium and a bunch of other European nations are also headed down the same road.

The truth is that the euro is much closer to a major collapse than most Americans would ever dream.

The world financial system is teetering on the brink of another major financial crisis, and rising oil prices certainly are not going to help that.

If the price of oil breaks the 100 dollar mark, it will be time to become seriously alarmed.

If the price of oil breaks the 150 dollar mark in 2011 it will be time to push the panic button.

Let's hope that the price of oil stabilizes for a while, but unfortunately that is probably not going to happen.

The truth is that the economic outlook for 2011 is bleak at best, especially if the price of oil continues to skyrocket.

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  • Nova Johnny

    You are correct sir. As the price of oil skyrocketed it made travel to work and home more costly. That in turn lowered the value of huge homes in the suberbs, some of them were subprime. I firmly believe that the oil price triggered the mortgage meltdown. It was bound to happen anyway, but that was the first snowflake that started down the mountain side!

  • Kevin

    History repeats itself and we used to have to look back quite a few decades. We also used to attempt to correct the problems. The regulations adopted during the great depression breaking up banking and investments is a prime example. It took us decades to initally forget and then repeat same mistakes. We’re now having more rapid swings in the economy that rival an ECG a bad ECG, the type preceeding a Vfib heart attack.

    One can sense a greater economic downfall brewing. Comforting words from highly educated people fall on deaf ears when they never tell the public a problem is pending.

  • VegasBob

    Look on the bright side. CONgress just extended the Bush tax cuts, so the wealthy will have plenty of money to pay for higher gasoline prices. And I expect that gasoline will be close to $10 a gallon in the next five years.

    I fully expect the wealthy to use their tax cut money to continue doing exactly what they’ve done for the past decade – de-industrialize the US as fast as they can.

    I was a Republican for 40 years until I wised up under the reign of Bush the Dumber. I finally figured out that the wealthy are not benevolent. They are predators. The wealth never, ever, ever trickles down. When we give the rich everything they want, they simply shut off the faucet!

  • chinlee

    rising unemployment will keep gas prices from goin much higher.take your pick, sky high gas or sky high unemployment, can’t have both

  • Kevin

    Vegas Bob

    80% of US Senate Democrats voted for China Free Trade which has eviscerated US industrial capacity. A Democrat President signed it into law. A Republican would have too. Every Presidential front runner in the last election that held US Senate office in the fall of 2000 when the vote took place voted yea for it. The list is long and distinguished. It’s a literal who’s who. If you think the Democrats are your savour your mistaken. Both horses are bought in the two horse race.

  • William

    I, too, was a life long Republican until the Nov 2004 election when I voted for a Democrat for the first time in my life. WHY? The answer is that the unnecessary war of choice in Iraq was, and is, illegal, immoral and in violation of the UN charter. Also, the USA has internal laws, and has agreed to international treaties and conventions, which prohibit torture. The CIA and the US military and government contractors murdered and tortured many in iraq. This loss of moral decency has not yet been addressed by America. As for the fiscal condition, we are DOOMED, regardless of the price of oil/gas.

  • mondobeyondo

    Pay very close attention to the price of oil.

    As oil is priced in U.S. dollars, it’s a pretty accurate barometer as to the real health and state of the dollar as well. (Pay no attention to the men behind the DJIA, S&P and Nasdaq curtains.)

    And it’s not just about gasoline either. Our entire economy is literally based around the consumption of petroleum.

    Plastics are made from oil.
    Fertilizer is made from oil.
    Many power plants use oil to make electricity.
    Ever read the ingredients on a can of Raid? It says, “Contains petroleum distillates”.

    So if the price of oil goes up (and the dollar goes down… it’s an inverse corrolation), what do you think will happen to the price of food? It’s gonna go sky high. You betcha!

    You need fertilizer to grow crops.
    Then you have to harvest those crops. You need tractors, harvesters, etc. for that. What do you think they run on, corn syrup?
    And then you have to get your product to the marketplace. You’re gonna need trucks for that. Trucks run on diesel and gasoline.
    You like chicken, beef and pork? Well, guess what they eat? Whatever corn isn’t used for ethanol, gets thrown into the feed. The price of corn is going to go through the roof. The related products also (corn syrup, Corn Flakes, etc).

    Well okay, cows eat mostly grass. Except for those stores and restaurants that boast of “corn fed cattle”. Supposedly more delicious and flavorful meat. I don’t know, I can’t afford a ribeye steak.

    Hopefully someone out there has an idea to make vehicles that run on sunflower oil. They would be millionaires overnight.

  • mondobeyondo

    If you want me to sum up our current financial situation in five words or less… well, here goes:

    Yes, we’re screwed. God bless!

  • El Pollo de Oro

    The price of gasoline is likely to skyrocket in The Banana Republic of America (formerly the USA) in the future, and that is a huge problem in a country where most people drive most of the time. Many parts of Europe and Asia have excellent mass transit, but public transit is a joke in most American cities (exceptions include NYC, Chicago, Boston and a few other places). Of course, skyrocketing fuel prices are a huge problem even if you don’t have a car. Rising fuel prices affect both motorists and non-motorists.

    Between rising fuel prices, a weakening currency, brutal unemployment, low wages, violent crime, a broken health care system and rising food prices, the future is going to be truly hellish in this Third World nightmare that our country has become.

  • zack

    Oil is priced in dollars, and when the value of the dollar falls, the cost of oil goes up. This trend is going to continue as long as our government continues to spend us into oblivion.

    Our company Path to Asia http://www.pathtoasia.com/jobs/ helps Americans move to Asia for jobs and prosperity. Visit our site for details.

  • http://newpapyrusmagazine.blogspot.com Marcel F. Williams

    Gradually moving away from petroleum and fossil fuels in general over the next few decades is the only hope for the American economy.

    We need to start building nuclear power plants and producing renewable carbon neutral gasoline, diesel fuel,jet fuel, methanol, and methane in the US as rapidly as possible.

    This will create jobs and keep more money here in America while also protecting our children and grandchildren from the devastating economic effects of petroleum hyper-inflation in the future.

  • Karen

    If OIL goes up this time you will have to learn to live with that price. Peak Oil, extended Obama/Bush/Tax Cuts/war costs/more unemployment/climate change/more bank bailouts/ sorry so be so negative but I wake up to a sunny Arizona day and by 3:00 I read or hear more bad news, but our econmy is growing – slaes are up – stock market is up-
    Just tell (WE the PEOPLE) the TRUTH!

  • de Malfosse

    The cost of oil is not increasing – it is the purchasing power of the dollar which is decreasing.

  • Gary2

    This is capitalism at its finest; It is a very efficient system. The new question we must all ask ourselves is “Is this the economic system we want?” Upward mobility (which has always been the carrot dangling on the string in front of our eyes) is over, so why would we want to continue with an economic system that not only no longer serves us, but is brutal to those who are expendable­. Maybe we need to reconsider the economic system so thoroughly demonized by all good card carrying capitalist­s…. wait….. wait…… socialism. Hmmmmmmm.

  • Michael2

    I am banking that if there is a socioeconomic collapse that some of the unintended consequences of it will lesson the impact of it could have on us. I think it will finally dawn on people how much control over thier lives they really do have. That we don’t need credit cards, fiat money, the big banks, etc. I am hoping bartering will become a more prominent transaction if a collapse does hit. I may be being a bit pollyanna-ish I know but as they “hope for best but prepare for the worse”.

  • http://www.nodebtusa.com Maceo Hansard

    I just want to say that we hope for the best. Because the history repeats itself!
    nodebtusa.com

  • Roger

    VegasBob,

    I agree. Problem is who make the wealthy, wealthy? The little people and we can just as easily make them poorer. We keep buying what they are selling and at exoritant prices. What would happen to people like Bill Gates if we just stopped buying PC’s becuase we did not want to support Microsoft. Their shares would plummet. The average person has all the power but we don’t know it and cannot cooperate. Cooperation rather than competition is the only real answer in the end but is again our nature.

  • http://brunolem.wordpress.com brunolem

    Bernanke, Geithner, Obama and the US Congress have managed to do something incredible with their spending and printing frenzy… they have managed to send the country back in time, back in 2007.

    One could also call that a reset.

    The cost? A lot of (fake) money and tens of millions of victims, left on the side of the road.

    But it is a cost that they were willing to let other people pay, in order to bring back to life their former fantasy world.

    Thus, of course the price of oil is going back to its previous level, and so do market indexes (Dow, SP 500…).

    The problem is that travelling back in time is against the laws… of nature, and there is hell to pay for trying to defy nature.

    I don’t how many times the magicians are going to be able to loop the year 2007, but once the charm gone, things are not going to be pretty!

    Click on my name to visit my blog.

  • mIchael

    You have left out the essential component of the price increase:

    Since the end of 2004, the overall output of oil has not been able to increase. Supply stagnated, and has been on a bumpy plateau ever since. Not even prices over $100/barrel was enough “incentive” to bring new oil to the market, raise supply, and moderate prices. Therefore, demand destruction kicked in — demand dropped, and price followed.

    The reason oil supply cannot be raise? We are at the all-time peak in oil production. What comes next is decline, in perpetuity, and who knows when it will begin and how fast it will proceed, but I’d suggest buckling your seatbelts.

  • Post-Lobotomy Gary

    Uh, tax the rich and spread the wealth. Problem solved. Uh.

  • Save the Republic

    The only “trickling” you feel from trickle-down economics is the trickle of the rich urinating on you.

  • happyface

    When the price of oil exceeds the cost of alternative sources of energy, things like tars sands and shale oil will come into their own. But that price may be high and the damping effect on the economy will be heavy.

    Americans need to use less oil! Car pool. Stay home. Walk. Bicycle. Combine trips. Return. Recycle. Reuse. THINK!

    Two birds with one stone saved the other missile for a prowling saber-tooth tiger.

  • flubadub

    Here is a term we will begin to hear spoken often: “invescalator”. Invescalators are those who see oil prices rising and increase their buying activity in the oil futures market. Increased buying escalates prices which in turn sparks further buying until demand for oil futures contracts is a larger driver of oil prices than the actual demand for oil itself. In 1960 oil sold for $3/bbl.

    http://www.ioga.com/Special/crudeoil_Hist.htm

    If minimum wage increased at the same rate as oil prices you could earn over $53/hr. working at McDonalds today.
    If the children in congress would put the infantile bickering aside and announce an initiative to take advantage of our country’s natural gas reserves by increasing its use as a motor fuel oil prices would plummet. Gas powered vehicles are nothing new. They’ve been in use for decades and gas is cleaner, cheaper, plentiful and we have more of it than we know what to do with right here in the USA.

  • laura m.

    Oil prices going higher will effect everything and yes, houses in the “burbs” and rural areas will lose value..way more than those in towns/cities close to everything. All the peak oil web sites say about the same, that the easy to get oil is over with and it will get harder and more expensive to get. Oil has peaked out, and the most prosperous twentieth century times are over with. It is down hill from now on. Just google in peak oil and same on you tube..facts are facts. The Elite are exploiting and controlling the masses on commodities, banking, natural resources (water control), etc.

  • http://www.altroent.com/resources/Education/Science/Economics/economics.html rabble

    The increase of gasoline prices to nearly $5 a gallon certainly contributed to my economic collapse here in Ohio.

  • No Stocks 4me Kramer

    IF it gets the lame brains at the BLS to see the CPI should be bigger and the friggin banks to start payin 5% or better on “my money” Bring it on!.

  • GoneWithTheWind

    The sudden surge of oil prices in the fall of 2008 should be investigated. The supply/demand cycle didn’t drive it. I think there was bloodless coup and the least the American public is owed is the truth. Who pulled the strings and why?

  • vegas777

    There will be a huge Black Market and these rich fukers won’t even “get it” then. NYS alone has lost 41million smokers [and their taxes] to the Native American cigarette trade. Ouch! Cigs in NY have recently went up to over $12 a pack in some places! Taxes. And more Taxes. Regulations up the AS*. Do this. Do that. It’s a monopoly game and “we the people” always lose. or maybe not…. Americans are getting really fuking pissed. Our kids have NO FUKING FUTURE but Michelle jets off to Spain? JAY fuking Z sits in the OVAL OFFICE CHAIR? BEYONCE escorted by the SECRET FUKING SERVICE THAT “WE THE PEOPLE” PROVIDE? Take our TROOPS TO SHOP? WTF? One can almost feel the brewing storm…..

  • Mary Grace

    The United States is the Babylon of the Apocalypse. “Depart from her, my people, so as not to take part in her sins and receive a share in her plagues, for her sins are piled up to the sky.”

    Read Chapters 17 & 18 of the Apocalypse; Jeremiah 51, and Isaiah 13 & 14.

    “Against Babylon the sea rises, she is overwhelmed by the roaring waves.”
    (Jeremiah 51:42)

  • Brad

    Do you ever wish people would define “wealthy”?

  • farmer brown

    The pc bs in this country has to stop you are now considered a better citizen if you are a free loader rather than a producer. The other thing that needs to end it this religous like ENVIRONMENTALISM this is killing us. If you want cheap oil drill. We are a fuel loaded nation let’s give the middle east a run for thier(our) money. Environmentalism is not human friendly.

  • ALICE

    Lets see what we up against!
    1) Tax bill added 1 trillion to out debt!
    2) Federal Reserve will dump another trillion onto the market!
    3) Gas priced on the rise, without a ceiling!
    It all adds up to devaluation of any asset we have, and inflation on any asset we don’t have. Poverty at warp speed, with no one to come to our rescue! Chinese poverty has been imported onto us, soon all we’ll be able to afford is rice! STOP SPENDING/SENDING YOUR MONEY OVERSEAS! IF EVERYONE STOPS SPENDING WE WILL BRING DOWN THIS WHOLE SCAM AGAINST THE AMERICAN PEOPLE. OUR SPENDING IS JUST CREATING A BIGGER MONSTER! CHINA, BANKS, WALL STREET, AUTOS, WILL ALL SHUT DOWN IF WE STOP SPENDING OUR MONEY!

  • http://www.grandmasdepressionmemories.com/ Leigh Kimmel

    It’s been my firm belief ever since it happened that the 2008 housing crash was triggered by the spike in gas prices that summer, and the resultant spike in prices for every commodity that has to be physically transported. It was an excellent example of the proverbial “straw that broke the camel’s back” — people’s budgets were strained by years of overspending, by mortgages that were too big, but they were just squeaking by each month. When that extra expense was added, it was just one too many things, and everything started coming apart for a lot of families. If they paid for the gas they needed to transport their physical presence to work (a necessity for most jobs), they didn’t have enough money to pay their other bills, but if they didn’t get to work, they didn’t have a job and didn’t have any money to pay for anything. So gas got paid for, but other bills got paid roulette-fashion or not at all, and pretty soon loans were in default and everything unraveled into the present mess.

    My husband and I have been talking for the past year about how another major spike in gas prices will just cause another crash, and for the exact same reasons. People are still over-extended, and their pocketbooks simply can’t absorb the additional hit, but as long as most jobs require transporting one’s physical presence to the workplace, gas is going to be people’s top priority, simply because otherwise one doesn’t have a job, and thus doesn’t have money to buy anything else.

  • Jack

    Overall I agree with your statement, but you appear to forget that the USD has lost ~20% of its value since 2005 which overemphasizes the increase in oil prices. The price of oil is around 65-70 in 2005 USDs. It’s bad but it’s not really as bad as it looks.

  • Dwayne

    I find it interesting that the oil prices were shooting up at the same time that the stimulus money was being handed to the banks, and the cash was not going to the public as expected. I also noticed (and CNN confirmed later) that when the feds told the banks that they needed to increase the “cash” on the balance sheets, and to lower the “investments” on the balance sheets, that at the same time, the oil price almost dropped into such a low point that even the oil industry was concerned about future exploration. For those who beleive we are running out of oil, remember that an oil field that is being tapped in the US, located in ND, MT and Canada has enough oil to keep the US going for 217 years alone without a single drop of oil from foreign places. So, go figure.

  • mondobeyondo

    Many American cities, especially in the South and West, are built around the car culture.

    Walking down the sidewalk downtown works in New York, Amsterdam, London and Paris. They are relatively compact cities. It does not work in Los Angeles, Las Vegas, Dallas-Fort Worth, Phoenix, Houston or Miami. You need a vehicle of some type to get from point A to point B (especially in L.A. or Phoenix, which are really spread out. Metropolitan Phoenix is nearly 300 square miles in area).

    You can try to do it on a bicycle like many Europeans do. But oh, the aching muscles!

    How ironic that these same cities are suffering the most from the housing crash. Add a petroleum crisis, and I dread to see what will happen next.

  • mondobeyondo

    @Brad – re: The definition of “wealthy”

    Ummm. It depends.

    For the average American, “wealthy” would be a 52 inch flat screen TV, an iPhone for the 14 year old daughter, a combination lock and safe to keep the 14 year old daugher away from the iPhone for at least 15 minutes, an iPad for yourself, and a Kindle for the son (books are sooo 1995).

    If you’re a Indian or Chinese citizen, I suppose a bowl of rice would be considered wealthy.

  • mondobeyondo

    It’s not as much about the value of oil, as it is about the price!!!

    Oil is priced in dollars. The dollar is sinking. Oil is increasing in dollar valuation, because the dollar is sinking.

    Despite what the wizards of Wall Street tell you, oil will gradually (if not immediately) increase in price as compared to dollars, because (get this!) – the dollar is sinking!

    The value of the oil didn’t go up.
    But the price you paid for gasoline DID!!

    Your gasoline and other by-products of petroleum will function just as well today, in your cars, radiators and so forth, as they did back in 2005.

    Sooooo, why are gas, heating oil, etc. prices increasing? Hmmm.

    Hear me now, and ask me later…

  • cindybin

    It sure is good Obama put in those ethanol tariffs isn’t it? We certainly would hate to see a cheaper alternative fuel come along and mess things up for the oil companies

  • stewiejr

    Just what the elite predicted back in June at Bilderberg. Oil prices would remain stable during the summer and rise in November and beyond. According to a recent oil elitist who just died from cancer, Ken Fromm, oil will reach $150-200 in 2011. Now would be a good time to prepare for the worst.

  • Bruce

    Peak oil is a myth read John Walker book Resurrection of a Nation: Solving the Energy, Financial, & Political Crisis in America We could have under $1 gasoline but the Eco Nazi have blocked off the oil in America. You want to solved this TAX the Eco Nazi groups tax all the people that support them. You don’t want drilling in ANWR find your taxes go up 10% no drilling in Colorado fine your taxes go up 10% you don’t want new refinery build fine your taxes go up 10% this is crazy only in America do we allow professional liars in Eco Nazi groups cut us off from our oil. Read the book wake up.

  • Heidi

    Did the highly-inflated US dollar, corruption in the highest levels of the government (congress and the presidency), corruption of the banking system, corruption of securities ratings agencies, corruption of accounting firms, corruption in all the systems that underpin world trading in commodities and securities, undermine the world econony.

    Yes. And US voters helped all of that happen.

  • Jeremiah

    @Mary Grace: I agree. America is babylon. This is a slow-motion nightmare, which we seem to not be able to wake up from. It reminds me of auto accidents, where everything instantly goes into slow-motion. Picture it: you are in a car on a narrow winding road behind a slow driver. You get impatient, decide to play chicken (RUNNING UP DEBT), ignore the rules of the road (NOT SUCCOMBING TO TEMPTATION) and pass the slowpoke on a curve (GIVE IN TO YOUR URGES, IGNORING THE DANGER AHEAD). As you pass, you see an oncoming semi honking his horn (WARNING WARNING!!). You can’t go forward, or back into your previous lane (YOU ARE BURIED IN DEBT AND MAYBE HAVE NO JOB OR PAY CUTS). You can only stare ahead as the truck barrels toward you, knowing you are going to be hit and that you have not prepared for the impact. That moment is when your life flashes in front of your eyes and everything goes to slow-mo. That is what I feel on a daily basis. Numb. The horror of what I see coming at all of us if we can’t turn this around soon. God is our ONLY hope, but if people are so seared in their minds as to reject His direction of how we are to live our lives, He is going to let go and drop us on our heads, which we have never experienced before. The elite are laughing at us as they plan our destruction. It is all about control for them. They are slowly bleeding us dry, leaving us for dead with no resources – jobs, food, water, money, gas, etc. Our homes are spread out. Most of us are cut off from relatives and have few friends. The era of the Walton’s or Mayberry is effectively dead. Churches have failed. Social networks are overwhelmed or non-existent. I see Mad Max ahead. So what do we do folks? God is our salvation, IMHO. Get on your knees and pray.

  • Benoit

    @mondobeyondo

    No, no and no! you don’t need fertilizers to grow food. Fertilizers and pesticides were invented during WWI. Effectively, when you add fertilizers in your field (nitrogen, phosphorous and potassium (only these third ones are proposed by companies)) the productivity increased but your plants become sick and insects come to eat sick plants…then, same companies sell you the pesticides ad hoc….and it destroy all biodiversity in the soil. This biodiversity (worms, microbes, microorganisms) are able to fix nitrogen from atmosphere and worm remove the earth for minerals like phosphorous and potassium…but now it is too late, all soils are poisoined and life disapeared from soil….and we have a stupid dependent oil agriculture…so sad

  • VegasBob

    To Kevin and others,

    I do want to clarify that even though I left the Republican Party after 40 years and started voting for Democrats, I don’t necessarily believe that the Democratic Party is going to be my savior.

    The one point I give the Democrats is that they at least pay lip service to those who have been economically devastated through no fault of their own. The Republicans won’t even do that, instead calling the unemployed lazy loafers who want to sit back and collect unemployment checks.

    I tend to think that Kevin is right – both parties have been bought and paid for by the K Street lobbyists in Washington, DC.

    But I no longer believe any of the Republican nostrums about free markets, free trade, de-regulation and capitalism. In 2010 USA, all of that is a lie. The system is managed and operated for the benefit of the wealthy, to the detriment of the former middle class that used to exist in this country.

  • mondobeyondo

    Come gather ’round people, wherever you roam
    And admit that the waters around you have grown
    And accept it that soon, you’ll be drenched to the bone
    If your time to you is worth savin’
    Then you better start swimmin’, or you’ll sink like a stone
    For the times they are a-changin’…

    Bob Dylan, 1964

  • http://www.danielrevelationbiblestudies.com Robert Stout

    The current middle class of America cannot stand many more price increases especially in the price of gasoline. A poor family of four is really struggling right now to keep their head above water. The corruption and greed of Wall Street, U.S. government and these giant oil companies are beyond measure!!! But listen fellow Patriots, they are getting their reward now, but will not get their eternal reward because they have chosen by their own free will to follow the devil and his minions right straight to hell!!! One day soon there will be an accounting before God for everything, whether seen or unseen, there will be no difference, God sees all!!!!

  • mattressmatt

    Any argument for or against “trickle down” economics misses the point that those at the top of the paper pyramid get the most value out of the currency they print and EVERYONE else participates in trickle on economics. Left vs right arguments got us in this mess.

  • http://www.planorperish.com/ Gutter Economist

    Before the next energy crisis and the coming economic collapse, consider purchasing a modern electric bicycle, tricycle, scooter, or conversion kit.

    http://www.electrickbike.com/

  • http://WBDM Joe in JT

    When diesel at the pump reached more than 5 bucks a gallon and regular wasn’t that far behind, I noticed a severe drop in motorist on the road. Independent truckers got hammered, everyone was depressed, their whole world was turned upsidedown. It was very serious and it trashed the economy, people couldn’t pay their mortgages either, they barely had money for food. Then when asked if we could open the emergency oil reserve down in Texas, George W Bush smiled with that stupid **** eating grin and said, “no we aren’t going to open the emergency oil”, then he laughed.

  • Maria

    Richard,

    I too believe there is a viable way to restructure the US economy and give us all a fresh start. But my belief stems more from gut feeling rather than specifics. If you have some specific ideas, I’m listening. I think a lot of other people out here are looking for answers too.

    I personally would like to see the Fed and IRS disappear, but too many people in power will make sure that never happens. I know the Federal government needs to generate income through taxes, but I would rather see that tax based on consumption rather than earnings. Taxing people on their productive or savings capacity seems very counterproductive to me. I believe removing taxes based on income and savings would go a long way to encouraging business and savings growth in this country. Taxes based on consumption seem more equitable to me. Those who consume less pay less tax. Those who consume more pay more tax. And maybe some things shouldn’t be taxable…necessities like whole foods (veges, fruit, meat, milk, eggs, flour) and water. I believe too many people eat a poor diet of processed and junk food only because it is often much cheaper than buying whole nutritious food. For example, a can of soda is cheaper than a bottle of water. Why?

    I have more ideas, but this post is already too long.

  • sharonsj

    You do not need fertilizer to grow crops. Read an old book called “Secrets of the Soil.” You can actually use pulverized rocks to add the necessary minerals. We’ll have to go to alternative and old-style living to survive our chemically toxic world, so maybe a collapse would actually be beneficial.

  • http://theeconomiccollapse john

    if gary2 things Socialism is the way to go why has it failed in cuba,north korea,ussr, Venezuela rulled by that idiot hugo chavez THE PROBLEM WITH SOCIALISM IS EVENTUALLY YOU RUN OUT OF OTHER PEOPLES MONEY gary you are self loathing blame america first pinko commie san francisco liberal knock it off

  • Kevin

    Vegas Bob

    The lip service the Democrats give the public is what bothers me. It’s a false hope that diverts attention and gets the masses to believe that they may have some success.

  • Daniel

    Does it really matter? The whole system is destabilizing and if oil skyrockets, the chinese and indians will still buy it.

    And for those spouting about capitalism/socialism I have one quest.. the republicans and democrats are both completely controlled by the financial/banking industry. They don’t give a crap about anyone except their profits and they’re manipulating congress to whatever end they wish. The simple fact is: this isn’t a democracy.. it’s a plutocracy.

  • http://www.osixs.org morpheus

    Good Article,

    People better wake. Most people have forgotten that oil kicked off the recession. Are I should say the depression. This recession has being going on since reagan. The Clinton era was just a lucky breather because of the internet tech boom. It’s mostly down hill from now on.

    @ Daniel,

    Good to see someone getting mad around here.

  • http://www.osixs.org morpheus

    @Maria and Richard,

    There is a way to restructure our country. But capitalism is over. There is no way to restructure capitalism as we know it.

    Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )
    I think this is the only real chance for america and the rest of the world for that matter. Or else, there’s going to be a lot of carnage, pain and suffering.

    It’s good to see someone looking answers. Endless talk aint going to cut it.

  • http://www.osixs.org morpheus

    Carter tried to warn us about oil/energy problem. But no cared. It’s too late to hit the panic button. It takes a lot of time and money to fix the oil/energy problem along with all the other problems we have ignore for the last 25 years.

    We have to start doing something.
    Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )
    We don’t have to live in fear. “Spread the News”

    More and more people are starting to get it…

  • viktik

    I need to know what causes the oil prices to skyrocket and what caused it to fall so sharply in 2008.
    Was it done deliberately to cause economic panic?
    Increase the oil price slowly till the economy collapse then decrease it sharply.There must be some kind of benefit or profit gained by who does this.Big Oil Companies.

    Or may be some Elite People Are using Oil Companies to put there Agenda to the world.
    Many Of the production work of Western Companies Are now done in China and other eastern countries as cheap labor are available.I think These people trick There own country people in the the name of recession to move the job to eastern countries ofcourse for low labor cost.

  • James

    You can deny that there is a Peak Oil situation going on. However, the circumstances will dictate the future of our economy. Not the government or the Stock Brokers on Wall Street. These circumstances include the diminishing of the total World supply of Crude Oil.Crude Oil was made millions of years ago and it isn’t being replaced at a rate that will allow us to resume our present standard of living. So, we need to prioritize our needs and change our paradigm to fit the circumstances that we will soon face. We should be getting our agriculture sector in order and redesign it so it fits the energy supplies of the future. We need to get our railroads back up and running, while at the same time start to divert the money from the Highway Funds to pay for the rail systems. Alternative energy sources may be good for small local areas, don’t look for it to power the large corporate factories. These sources just can’t provide the amount of energy required to run them. Small communities need to be brought back, and make them walkable or bicycle friendly. I could go on and on, and the government knows that they need to start doing these things and more. Otherwise, we will suffer greatly because of our ignorance.

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