There’s a bad moon on the rise – in the form of upward creeping gas prices.
Unleaded regular is surging toward $4 per gallon again – the same highs that preceded – and which arguably triggered – the current economic catatonia. If it happens again, though, the effects are probably going to be even worse. A man on his feet can usually take a sucker punch, or at least recover from it. But if he’s already on the ground and you kick him in the head, he’s done-for.
$4 per gallon gas could do exactly that to the U.S. economy – what’s left of it.
This time, unlike last time, unemployment is already nearly 10 percent (closer to 20 percent, if you go by the old way of measuring that includes people who’ve stopped even trying to find work).
This time, unlike last time, our “too big to fail” industries – including the car companies – have already failed once and it’s doubtful the government (excuse me, the Fed) can print more funny money bailout bucks without triggering either a currency devaluation or runaway inflation, maybe both.
$4 per gallon gas is going to mean a lot more than just paying an extra $15 to fill-up the car. It will mean everything is going to get proportionately more expensive, from the food on your plate to the stuff down at the mall. The tag-team of rising fuel costs and increasingly worth-less Federal Reserve Notes could seal the deal this time.
People who weathered the first crisis don’t have the reserves built up to handle Round Two.