A 40% decline in the dollar led to a 33% increase in the CRB and the dollar is at 72 against a global basket of currencies so it will take 3 more 40% declines in the dollar to get us to $200 oil, Following the same path we’ve been on to get to $100 oil, that would be going from 72 to 43 to 26 to 16, giving us a US inflation rate of roughly 450% overall. This is the dream of starry-eyed energy traders who are too bad at math to realize that if they do successfully drive oil prices up to $200 a barrel and double their money, that the money they have will only be worth 1/4 of what it was when they started.
Really people, think about it - we are talking about $8 per gallon gas. We are talking about $160 to fill up your tank and $1,000 a month to heat a home. We’d better start giving people monthly raises now as it’s going to be really hard to know if our employees will be able to afford to drive the car to work with projected increases of .10 per gallon per month for the next 4 years.
The average US driver has a car that gets 20 miles a gallon and drives 15,000 miles a year. That’s 750 gallons a year. $4 a gallon is $3,000 more dollars of what used to be disposable income going up in smoke. Even if we conservatively assume that all the other increases in the CRB translate to "just" another $3,000 in forced spending and we cap utility increases at $500 (super conservative numbers) then we still have the average US wage earner needing $6,500 more in net wages to support $200 oil.
That would be roughly $10,000 pre-tax or roughly a 40% increase in the average person&rsq
uo;s salary JUST TO STAY EVEN WITH WHAT THEY ARE SPENDING NOW.
