Crude oil, a fossil fuel resource deriving
from the death of large quantities of organisms buried underneath the earth’s surface for
literally thousands of years. Not exactly a duplicable process to address the modern
day energy crisis. Americans consume 20 million barrels of oil
each day. The problem today is what America will do with 5, 6 and inevitably 10 dollars
per gallon for gas. We saw a massive increase in gasoline prices during the stock market
crash in two thousand seven and eight. This was a key factor along with flat wage growth
for those who remained employed in breaking the backs of American consumers. In a matter
of 8 months, America saw exponential growth in the average price per gallon from around
two eighty to four twelve. [During this time] profit margins for truck drivers and other
individuals who’s businesses and work rely on the use of fossil fuels, inversely responded
to the rising cost of fuel during this time. According to the National Travel Household
Survey, on average, Americans drove thirty six point one three miles per day in 2009.
The average car in America gets about 20 miles per gallon. In March 2009, gas prices on average
were two dollars per gallon which means that every day, individuals would be spending approximately
three dollars and sixty one cents on fuel. This would be twenty five twenty seven per
week, one hundred and ten dollars a month, and one thousand three hundred and fourteen
dollars a year. Today’s average price per gallon in America is three ninety two per
gallon. For the same daily miles travelled, Americans would be paying seven dollars and
eight cents per day, forty nine fifty seven a week, two hundred and fifteen dollars per
month and two thousand five hundred and seventy eight dollars in a year. This totals an increase
of over twelve hundred dollars per year in fuel costs meaning the cost to drive has nearly
doubled in the last three years. This is for certain an unsustainable price increase that
the American consumer cannot continue to absorb. [Americans interviewed]
We saw gas triple from a dollar forty at the end of the 1990s to where it is today. The
same cannot be said of wages. Take truck drivers for instance who were used
to filling up for around two dollars and twenty cents a gallon for diesel three years ago
and who had saw a national average over twice this amount at four dollars and seventy two
cents in two thousand and eight. In a normal healthy economy, this cost would be passed
on to the consumer, but what we saw was increasing unemployment flooding the market with workers
and driving trucker’s wages down, effectively making it impossible for many truck drivers
to stay in business. [Clip of truck driver breaking point]
Trucks deliver seventy percent of all freight transported in the U.S. accounting for six
hundred and seventy one BILLION worth of manufacturing goods shipped WITHIN the United States alone.
These rising gas prices are not only a problem for the trucking industry but also for airlines,
taxi services, retail services, restaurants, car dealers, hair stylists, government and
many other industries. Liquid fuels are an integral part of economic
sustainability and when we see prices rise, the butterfly effect will resonate through
almost all aspects of the economy. gas goes up 1 cent per gallon, the United States Postal
Service operating costs go up by eight MILLION dollars. If gas goes up a dollar a gallon
this translates into one hundred billion in additional household energy spending. This
would reduce annual real GDP growth by about a whole percent.
Something that people don’t realize is how much the cost of fuel impacts the housing
market. Because the cost of fuel has historically been cheap, the option to live 30 minutes
to an hour away from work has been plausible. As the price at the pump continues to climb
another industry that could breakdown will be real estate. In areas not in close proximity
to quality jobs this is especially true. This means that Americans beloved suburbs, where
half of us currently live, will become ghost towns.
FutureMoneyTrends.com believes that America is approaching it’s breaking point where
a systemic breakdown in the economic circulatory system will result in another step down in
the economy felt first by the poor and middle class. The price projection that we believe
this will happen is five dollars a gallon. Already millions are crossing their breaking
point at the current national average of only three dollars and ninety two cents a gallon.
[Clips of people who can’t afford current gas prices]
As pointed out in our real estate market example, crude oil cost consequences trickle down into
more aspects of the economy than just direct things related to gasoline engines. Retail
stores will suffer as their consumers cut back on their trips to the stores; also they
will spend less when they get there. When the price of gas rises 50 cents a gallon,
that’s an expenditure that could be an extra fifty dollars a month or more for some long
commuters. If it rose a dollar that’s a hundred dollars more a month out of the pockets
of many who are already living paycheck to paycheck.
FutureMoneyTrends.com is expecting the U.S. to face the perfect storm of events that,
when combined, will send gas prices past the breaking point for the average American.
[clips of peak oil, middle east, inflation, DOLLAR, FED (catalysts for higher oil)]
There are three major catalysts that will cause gas prices to reach this breaking point.
Number 1: The dollar is in a state of collapse caused by a continuous increase in the money
supply by America’s central bank. Number 2: Instability in the Middle East and
potential war with Iran would greatly disrupt the supply of oil.
Number 3: The supply of cheap recoverable oil is dwindling along with a major increase
in demand. [arrow up demand, fast video clips background]
THE DOLLAR: American debt has reached 100% of our Gross
Domestic Product. During the next presidential term the debt will reach a jaw dropping twenty
TRILLION dollars. The current government spending level cannot be maintained unless MORE money
is borrowed and printed into supply. The U.S. Dollar has lost eighty six percent of it’s
purchasing power since 1971 as a result of a complete severing of the dollar from any
hard asset backing. This devaluing of our currency will continue to cause gas prices
to increase because of the simple fact that the dollar is losing value.
THE MIDDLE EAST: Israel has made statements that show they
have serious plans to attack Iran. Instability in the Middle East historically has caused
rapid increases in gas prices for Americans. Iran has recently threatened to close the
Strait of Hormuz through which twenty percent of global oil supplies are transported. In
1974 during the oil crisis gas prices had gone up forty three percent in the United
States in little over a year and continued to climb until the end of the 1970s. History
is currently repeating itself but this time gas prices are started at a national average
of three twenty two a gallon in December two thousand eleven. We have already seen a twenty
one percent increase in just four months partly due to threats of supply disruptions in the
Middle East and Iran being the third largest oil exporter in the world.
ENERGY SHOCK: NO MORE CHEAP OIL: Cheap oil is required for the American way
of life. Fifty percent of our energy needs are satisfied with oil. Demand for oil has
been rapidly increasing in the East where China in just ten years increased their oil
consumption by three point six million barrels per day and India increased their consumption
by about one million barrels per day. [Jim Rogers quote: Demand destruction in U.S.
don’t matter because of
the rest of the world] [Conclusion]
America is built for fifty dollar oil and two dollar a gallon gas. The seriousness of
our situation should not be overlooked. We have multiple forces that are either certain
or highly probable, that will drive gas prices past America’s five dollar per gallon breaking
point. Even with a weak economy and thus decreased demand, we will see rising gas prices caused
by the decreasing value of the dollar under the fiat money system, a potential war starting
in the Middle East, and dwindling supplies of crude oil across the globe. Rising gas
prices caused by these three catalysts will break the backs of the American consumer spiking
prices to a point where present day normalcy is no longer the reality. To learn more about
gas prices and how you can profit from this trend, please visit and subscribe at FutureMoneyTrends.com!