The Rise In Crude Oil and the Downturn of the Economy

In the past year, crude oil prices have skyrocketed. With the minimum wage for workers staying the same for now, many people are facing a choice of going to work or going on welfare. For many people, going on welfare is beginning to look like a better idea every day.

All you have to do is walk through the grocery store to notice the damage that high gasoline prices have wrought on almost every sector of life. Milk prices are around four to five dollars a gallon. Cereal that used to cost two dollars has shot up to at least four dollars. Soup costs more, eggs cost more, meat costs more - there is nothing in the store that has not been touched by higher growing and shipping fees. Farmers cannot grow and gather their crops without machinery, and every piece of machinery fuels on gas to run. Delivery trucks cannot bring the food in without gas. The people who offer these services cannot eat up this extra expense for fuel, so in the long run, the consumer pays.

When gas prices spike, car sales usually also suffer. The bigger the car, the worse the gas mileage is. Some vehicle producers are losing a great deal of money because all people want are smaller, cheaper cars, that use less gas. There is no market for their big SUV's and large trucks anymore. People are giving up their houses at an astonishing rate. No subdivision is untouched by for sale signs and foreclosure signs. Some even choose to "dump" their house. One day they are residing there, the next day they have vanished with their belongings. All of these problems can be attributed to the rising cost of gasoline. People who previously lived comfortably now have to pay double for their cars to run, double for their food, and increased prices on almost every item in every store.

There are predictions that by 2016, only seven years from now, a gallon of gas could cost around six dollars and forty cents. There is really no limit to how high the price of gas could go before it takes a significant downturn, assuming that is ever does. We will eventually adapt to this new pricing. We have no choice in the matter. Surely pay rates will go up to match the cost of living, but that will cause an increase in the cost of goods as well. One day we will all look back and remember when gas and milk were four dollars, and when one could afford to have a big car. These will be the "good old days." What a frightening idea.

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