With all due credit to George Carlin, circa last century, these are the seven deadly words today...Inflation, stagflation, recession, depression, peak oil, sub-prime and gold. I believe that Carlin also hyphenated two of his words.
No one is to speak of these words. And never in threes (think "Beetlejuice" and you get the idea). God forbid that a politician, ANY politician, should utter any of these words. We might actually begin to understand the enormity of our dilemma.
More liquidity? More inflation, higher gold, higher oil, lower dollar.
Lower rates? More inflation, higher gold, higher oil, lower dollar.
More bailouts? More inflation, higher gold, higher oil, lower dollar.
No bailouts? Recession, Govt. and FED try to stop it, more liquidity, more inflation, higher gold, higher oil, lower dollar.
I sense a pattern...let's see...gutless and down right stupid politicians (both parties please step forward) making horrid decisions to further their careers and appeal to the unwashed and uneducated voters. Nearly 50% of voters pay little or no federal income taxes soooooooo...that means that this 50%+ can vote for the remaining 49% to support them virtually without consequences. Since these voters don't have to work for it, environmentalism, global warming and tree hugging sound like good things to be "for". Therefore, we are "for" these causes with no plan to deal with the effects. Pols know this so they either intentionally or unintentionally pander to this block.
Oil companies-bad, profits-bad, polar bears-good, environment-bad...or good...depending upon perspective. Suspend gas tax for summer-good, build refineries-bad, beg the Saudis to produce just a few drops more oil-good (but not for our national stature). Nuclear-bad.
I really think every putz in Washington needs a basic class in cause and effect.
Today would be the effect. The cause has been happening for many years. No new nuclear plants for 30 years. No new refineries for about half that time. Can't drill off the coasts even though China and other countries drill just outside our national waters. Now we wonder why this happened all of a sudden. Oil goes up, jobs go away, the economy is "sluggish" (Did you ever think about the derivation of the word "sluggish"? To be like a slug. In this context, it sounds just a bit more repulsive rather than politically correct.)
This is all about supply. We have not even touched the surface of demand. 85m barrels of oil produced each day, 85m barrels of oil consumed. If you remember your basic college economics, the moment that there is 1 more barrel of oil demanded than there is supply, the incremental price of that barrel is indeterminate. It is what anyone can or will pay. And the price does not have to go up gradually. Just look up or remember the 1973 and 1979 oil crisis.
Everything old is new again and here we are with all kinds of causes and all kinds of effects. Only this time, the world is playing the game at the same time.
By the way, the peak oil for the US occurred in the mid-70's, more than 30 years ago. No one said we were quick studies...