Continuing a theme I started in January – is the WWO scenario coming true, but slowly? In the news today: retail sales sink as consumers wrestle with rising fuel and food prices; GM announces gas-guzzler incentives to try to move stock in the face of an industrywide slump; major airline shakeup brewing, in the wake of plunging share prices due to skyrocketing fuel prices; and the foreclosure crisis in suburbs continues. These are all headlines pulled right out of the events in last year’s World Without Oil oil crisis scenario.
Also today, Congress approved an economy boost package of $152 billion. Compare that dollar figure with the estimated economy drag of last year’s oil price hikes – $150 billion, as reported earlier here. In other words, the boost is calibrated to counter the damage being done by last year’s oil prices. What will happen this year? Sooner or later, we’re going to stop being able to spend our way out of the problem, and will need to address the underlying causes.