Let's start with this question,


Both, really, as there are several things at work.

(1) Yes, the U.S. dollar is due to experience a "correction," as it currently is grossly (40%<n<60%) overvalued. It is being inflated by the government's policies, and by the vast borrowing from foreign entities which benefit from an overvalued dollar.

(2) Since the US$ is essentially a function of the actual productivity of the U.S. work force, the entire work force, not just the ones who are actually working, it will continue to decline in value. Today, it takes more man-hours to produce less and less, hence, U.S. industry, such as it is, continues to move manufacturing and any other processes it can offshore. This is wise, as the U.S. worker is no longer willing to work more than 4-5 hours per week, spending the rest of his time in useless jibber-jabber, personal phone calls, carrying on "cottage-industry" activities without the knowledge of his employer, etc.

(3) As demand for petroleum in Asia increases, the price, relative to the declining US$ will continue to increase at a rate proportional to the price, just as nitrocellulose ignition pressure increases at a rate proportional to the pressure.

The increase in the number of automobiles in China has been growing at a rate quite consistent with that of bacterial culture growth, i.e. where the rate of growth increases proportionally to the population. I doubt it is much different in India.

There is no reason why the marketers of automobiles should behave any differently there than they behave here. Neither is there any reason to expect that the population will behave any more intelligently there than here.

This will put pressure on the world's crude oil supply that has heretofore been unseen.

(4) Since U.S. oil importers' profits are a function of the price, they LOVE the price increase. It costs them nothing extra to import crude costing $250 per barrel as compared with $75 per barrel. Refining doesn't cost more for $250/barrel crude either.

(5) Whie the face of the U.S. government laments the high price of gasoline at the pump, the persons behind that face all profit from its increase. The cabinet is loaded with individuals heavily invested in the petrochemical industry.

(6) As the pump price of gasoline has gone from under $2 to over $3 per gallon, U.S. consumers have continued to consume greater and greater quantities of gasoline. This has dumbfounded economists and industry analysts.



I'd say that (6) Seems to contradict that.



That depends entirely on what's being consumed. Our commander in chief has long been known to be a eugenicist. The form that takes, among his associates and peers, is that they want to strip the wealth from the middle class and absorb it themselves, so that they can "manage" those resources in a way that allows them, the oligarchy, to exploit the remaining population by selling them the products that they need to survive, and that they will consume on an ongoing basis. The rich man, since he owns everything, doesn't have a need for labor, aside from someone to mow his lawn, wash his clothes, harvest his produce, and build whatever he wants. Since unemployment will be in the 80-95% range, many people will simply starve. Of course, someone will have to bury them ...

The rich man doesn't need to sell anything durable, so it matters not whether anyone can buy it. He already owns everything. If his customers are only able to afford the essentials, which they consume in their entirety, the picture is changed. If the rich man owns everything, and the labor force owns nothing, then (a) the only thing the rich man needs is labor, and the provider of labor is dependent on him to provide the things he needs for survival. The rich man's wealth doesn't need to be "sustainable" since the rich man doesn't have to buy anything, since he already owns it. The only one who needs to buy anything is the poor labor provider, and he buys housing, clothing, food, energy, etc, from the rich man.



That would be true except for the demand for gasoline in other parts of the world. China and India, for example, are rapidly developing infrastructure which will produce more petrol-fueled automobiles and more demand for them. If the U.S. gave up the use of petroleum for anything at all today, the price would not fall to 0.



That would probably be true if the U.S. consumer were a sensible one. However, the automobile is too much a symbol of status, personality, fashion, etc. They'll drive 'em even when it costs $100 a gallon. Fewer of them will drive 'em when the price hits $100K per gallon, but some will. Some people drink wine that costs tens of thousands of dollars per bottle, too.



This would be true if the oil market were a closed one. What I'd expect is that when the price gets too high for U.S. consumers, the people in other parts of the world will drive. What you also have to take into consideration is the amount everyone pays for gasoline whether they use it or not. There are tax benefits of many sorts, oil depletion allowances, cheap leases of government owned land, and many others. Ask any European what they pay for gasoline.

The oligarchs are already in positions of power and influence. They'll see to it that there is plenty of cheap labor. At first, they'll accomplish that by allowing cheap labor to be imported. They'll also move manufacturing to other countries. The "middle class" will be required to pay for the government-funded services consumed by the imported labor. Fewer and fewer decently paying jobs will be available, so those people who formerly owned houses will be forced to sell them, ultimately to the oligarchs. After a time, all houses everywhere in the U.S. will belong to the oligarchs, about a hundred of them, though they'll try to reduce their own number. All food production and distribution, energy production and distribution, medical care facilities, and transportation systems, etc. will belong to them/him. Unemployment will rise. The standard of living will fall, until the U.S. majority will wish they were as wealthy as the average citizen of the poorest third-world country.

Surely you can see that this is already in motion. Unless people here, very soon, get their heads out of their recti, and the earbuds out of their ears, it will be too late.

RE