Are we headed to gasoline prices of $100/Gallon?

May 14, 2024

It is a mathematical fact that gasoline in the U.S. will eventually rise to $100 for a gallon (perhaps $130 for those interested in higher octane).

This is not fear-mongering, but basic arithmetic and economics. Here’s why.

The price of goods and labor is directly linked to money supply and market factors. This is not merely “supply and demand” economics, but an issue of overheating (or overleveraging) an economy by printing and/or borrowing too much money. When a government prints more money than the underlying economy is generating in real wealth, this is essentially a form of borrowing, often called “debt monetization.”

The United States has been doing this for decades, staving off the ordinary fluctuations in the economy punctuated by innovations and growth alternating with recessions – borrowing money in times of turmoil softens the blow, but also forestalls the consequences.

This is seen not just in the reckless Biden-Harris spending extravaganza masked by upside-down monikers such as “Build Back Better” or the “Inflation Reduction Act,” but across party lines and even centuries.

Notably, the largely forgotten S & L Crisis of the 1980s under the Reagan administration was never paid off: the proverbial can was simply kicked down the economic road (subject to compound interest, of course). The S & L debacle is estimated to have cost U.S. taxpayers some $132 billion, chump change by today’s debt measures. But that “crisis” caused the collapse of more than 1,000 U.S. banks and the insolvency of the Federal Savings and Loan Insurance Corporation.

That $132 billion in 1980s dollars has not yet been paid off – it was simply rolled into the national deficit, followed by decades of mostly deficit spending by both parties. The 2007-2008 financial crisis is estimated to have cost taxpayers some $498 billion, though President Obama famously lied to taxpayers in 2012, claiming the government recouped “every dime” used to rescue the banks he bailed out. Whatever the actual sum, it remains subsumed in the accumulated national federal deficit of about $35 trillion today.

Imagine running a household on infinite credit card debt, and you understand the federal government’s profligacy.

I am afraid America is on the precipice of a monetary disaster (to be “rescued” by an all-controlling digital currency). And I believe that even without interruptions of foreign oil supplies or Biden policies shrinking U.S. energy production and oil drilling, reckless U.S. monetary policy promises to drive the price at the pump for gasoline far above a paltry $100/gallon.

What do you say?

Come to the Financial Policy Council https://lnkd.in/eZU2UgYd, be a part of decisions that will shape the country’s future & share your thoughts.

#Oilandgas

Blackhawk Partners, Inc.
Brain Expansion Group
Hedge Fund Group (HFG)
Stanford Silverman
Phil Regenie
Zana Nesheiwat
Will Reese
Tim Kaelin
George McMillan
Sean McGee

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