$4 per gallon will usher in new worse crash of economy


My contention has always been that the crash of 2008 (which actually began in 2002) was due more to $4 per gallon gasoline than housing. Do you drive your car to work or do you pay your mortgage?

Well, we are on the verge of anothe $4 per gallon year. It will destroy our economy for good.


Your rating: None Average: 5 (1 vote)

The crash had to come since the economy expanded greatly on imaginary money that had little backing from real assets. The imaginary money backed by almost nothing, was issued by a Federal Reserve and U.S. Treasury as a way of keeping our inflationary economy going. That sort of inflation over-ran basic economic value and eventually it had to stop, then contract.

This is just a contraction from a period of unwarranted, even farcical and illegal expansion of the money supply. With every mortgage that crashes, more money is taken out of the economy. So what the government is borrowing $1.5 trillion each year to delay, is the ultimate onset of deflation. The longer they put it off, the deeper the deflation must be.

That's why housing in Toledo will continue to devalue. We lost too much of our economic base in the 1990s, and the 2000s just continued that trend. We had our own housing bubble here, folks. Housing prices kept rising when jobs and population kept fleeing at industrial rates. That's a bubble. Housing must track incomes since most housing is purchased using credit (i.e. mortgages), which are based on incomes. People use mortgages since they don't have any money. That's why the common consumer does any sort of payment plan: He doesn't have the money to purchase the item outright.

Housing is the leading deflationary indicator since it was the leading inflationary indicator during the overall Generational Credit Bubble (from the 1980s to about 2005).

Gasoline will keep rising since petroleum supplies are absolutely depleting and oil discoveries (which peaked in the 1960s) are falling ever further behind. Also, the USA at 300 million people will have to compete with 2500 million people in China and India alone, for access to such energy supplies. A guy in Bangalore driving a 55mpg Tata Nano will be able to out-bid a guy in Toledo driving a 14mpg Jeep Cherokee Sport. The guy in Bangalore consumes less gas overall, but it's still a wanted expansion of his standard of living. So of course he'll win the bid. Collectively, India and China will take the world oil supply away from us. And millions of unemployed Americans can't count on a fat welfare check from the government, since that's about the only way they'll be able to be consumers at all... well, after we flush the millions of deadbeats out of the system who aren't paying their mortgages today, which the banks are allowing to happen since they, too, are insolvent.

Anyway, blah blah blah. Succinctly put, the rise of gasoline prices won't herald an economic crash. The economy already crashed in 2008, and the rise of gas prices is one of the permanent developments from that. Taxes rising is also another permanent result. After all, the government under the Democrats borrowed $4.5 trillion in all our names over the last 3 years. That's about $30000 per working American, of which about 40% don't pay the federal income tax; hence the true taxpayers of the nation will have to pony up $50 thousand per, just to cover this murderously corrupt delaying action. If you're a net taxpayer, I hope you have that $50000 stashed somewhere, since you owe it and you're gonna have to pay it.

(I must remind you that Ron Paul is still running and if you expect to avoid any increase in that $50000, you'd better vote for him. The other clowns are just planning on running up more debt in your name.)

"My contention has always been that the crash of 2008 (which actually began in 2002) was due more to $4 per gallon gasoline than housing

What do you base this on? The recession began in December 2007. Gas prices at that time averaged just over $3/gallon. A half-year later, it went over $4/gallon but for only a very short period of time. By the end of 2008, it was down to about $1.60/gallon.

Pink Slip

I would think "The One", asking for 1.5 TRILLION more to waste on useless programs, and to give to His rich friends, in addition to rising gas prices would constitute a severe one-two punch aimed at the countrys' midsection.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.