Fear

What are we so afraid of these days? Every time I turn on the TV or read the news on the internet, someone's always afraid of something. Now it's gasoline prices and fear of $12 a gallon gas. This is simply ridiculous. The chances of gas EVER reaching that price point are so low that it's almost not even worth writing about. However, everyone I know is freaking out about it for some reason. My legal assistant traded in a 6-month-old Expedition last week for a brand new Avalon because she was spending so much in gas. I don't even want to know the bath they took on the trade, but come on. It's going to take them YEARS to make that up in fuel economy.

Face it, there is plenty of supply in the crude oil trade to exceed our demand. We're not running out of oil--there's so much of the Earth's crust we haven't explored and we will find more. In any case, oil is the latest bubble. Industry consultants are trying to buoy their own investments, so of course they're going to keep feeding fear to the masses. This "crisis" will soon pass, probably during the Olympics when demand in China starts to fall off. In every economic model, there comes a point where supply so far exceeds demand that prices will fall dramatically and this too will come for oil. It's happened with energy, semiconductors, housing, and now oil.