I’m reluctant to sound alarmed, but with the apparent shape of an impending economic Katrina moving over North America, it is getting harder to grant the benefit of the doubt. The dollar is sinking, exposing this import-heavy nation of ours to price increases in nearly every sector. The petroleum resources that energize global production and grease all economic skids is generating considerable doubt and turmoil in financial circles.

Oil production is flat in many key regions but the demand for consumer goods by the global middle class is expanding.  Our television-enchanted population, brains scrambled to numbness by chronic exposure to American Idol, are seeing only what the media powerbrokers want us to see. The eternal message that comes from TV is spend, spend, spend

The popular economic indicator is the stock market. The DJIA up- good. The DJIA down- bad. It is a sort of pallative. We’re lulled into a false comfort zone by the meta-stability of todays stockmarket.  Other dots are beginning to line up into a harmonic convergence, however.

Yesterday, as a humorous conversation starter, I asked a senior colleague well placed in the petroleum industry this question- “when will crude oil hit $150/bbl?”.  His reply surprised me. He estimated that it would happen this summer. Later, tempering his answer somewhat, he suggested that it would be more like $130/bbl, and mostly on the strength of nervousness in the market. He added that at present, crude oil stocks in the USA were in ample supply. 

The extended weakness in the dollar seems to favor American exporters and disfavors import consumers. Hmmm.  Does gov’t inaction on the weakness of the dollar amount to bias for corporate constituents and neglect of unincorporated citizens? Curious.

Advice- payoff as much debt as possible. Insulate your house. Get rid of that gas guzzler. Accumulate greater savings. A lot of the soon-to-be-unemployed are going to face higher higher gasoline prices for their commute to the new job at the auto salvage yard. And when they get back to their trailer at night, the thermostat will be set low due to higher heating costs. Beans and weenies, Mac-n-Cheese. Bon apetite!