Gas Is Going To $5 A Gallon, Consumer Spending Is Dead, And House Prices Will Fall Another 20%

Business Insider ^ | Saturday, October 2, 2010 | John Mauldin

[Willie Green]

This week I am at a conference in Houston. I must confess that I don't attend many of the sessions at most conferences where I speak. But today, the guys at Streettalk Advisors have such a great lineup that I am there for every session. But it's Friday and I need to write. The solution? This week you get a "best of" letter. The best ideas I've heard and the best charts I've seen at this conference. Then we close with two short but very thoughtful essays from Charles Gave and Arthur Kroeber of GaveKal on "The Morality of Chinese Growth." Lots of charts and something to make you think. Should be a good letter.

Oil at $125 a Barrel, Gasoline at $5

John Hofmeister is the former president of Shell Oil and now CEO of the public-policy group Citizens for Affordable Energy. He paints a very stark (even bleak, as he gets further into the speech) picture of the future of energy production in the US unless we change our current policies. First, because of the aftereffects of the moratorium. It is his belief that the drilling moratorium will effectively still be in place until at least the middle of 2012. There won't even be new rules until the end of 2011, and then the lawsuits start.

Gulf oil production will be down by up to 1 million barrels a day. Imported oil is now 67% of oil usage but will go to 75% by 2012. He thinks crude oil will be up to $125 and gasoline between $4-$5 at the pump. And it will only get worse.

[Willie Green]

WE'RE DOOMED!!!

[shankbear]

Obamanomics at work. The socialist Eutopia.....

[knarf]

All we need is regulations eliminated that prevent refineries from being built and any bans on drilling off shore lifted.

Think of it ... with 90% of our energy coming from domestic sources, and a smattering 10% spread out over our free traders for tokenism, we'd be back in the catbird seat .. making plastics and ... dare I?

Steel?

[MrEdd]

House prices will fall much farther than that.

[nmh]

Meanwhile we lease our oil fields to Mexico and Venezuela so we can BUY IT BACK at HIGHER prices.

[A.Hun]

Economically, yes we are.

I hope you’re prepared, I am.

[Toddsterpatriot]

The only thing that can save us is more wasteful spending on choo-choos.

[vladimir998]

I wonder if any of the Obamaniacs will actually BLAME Obama for the high gas prices as they did Bush?

Naaaahhh!

[bert]

what Republican speaker of the House would make the best President?

He will be just two heart beats away from the Presidency

[4Runner]

The hell with drilling offshore. We need to resume drilling ONSHORE. It was the environmentalist lobby in the ‘60s and ‘70s that threw the oil companies off the land and into the water.

[FlingWingFlyer]

And fat Eddie had his commie mobs out there this morning demanding more of the same! LOL!!!

[RnMomof7]

I heard that the loss of the gas subsidy would drive gas to $5 a gallon a month ago ...so I booked my Christmas flight then .

They will not be happy until the entire middle class is on welfare

[himno hero]

and tax attributable to debt service is going to triple, let alone paydown....

[nascarnation]

what Republican speaker of the House would make the best President?

Mike Pence would be my choice!

[Former Proud Canadian]

Current government economic policy is designed to strangle the energy industry and make all forms of energy much more expensive. It is an insane policy, a disastrous course.

The federal government could change energy policies and turn things around, and LOWER all energy prices, literally in a week. They simply don't want to. It makes no sense whatsoever.

[egannacht]

The way I hear it from Choo Choo Willie, the US should coerce us by gunpoint to accept confiscatory tax rates so the elite party bosses can ride AMTRAK to the Ministry of Truth. It’s the only solution to $5 gas don’t cha know.

[dljordan]

“We need to resume drilling ONSHORE. It was the environmentalist lobby in the ‘60s and ‘70s that threw the oil companies off the land and into the water.”

And what have the so-called ‘conservatives’ done about it? I’m betting that the new batch won’t be one iota better on the stuff that matters.

[SeaHawkFan]

I don’t care who you are, that’s funny right there.

[SF_Redux]

is it too late to apply for a job?

[pallis]

At least for the moment, I notice gas prices are slipping down, and I can’t help but think it has something to do with the upcoming election, because nothing else makes sense. With Obamao in the White House, and his his demonic czars doing his bidding, I can imagine gas at $5 a gallon, if not more. The anti carbon fuels lunacy comes with an expensive price tag.