Thursday, May 8, 2008

The U.S. Oil Import Crisis is Beginning to Sink In

The average U.S. motorist drove less in 2007 than they did in 2006 - about 1 % less.  Still, that was not enough to stop oil prices from DOUBLING since last year.  Preliminary data indicate that Q1 2008 vehicle miles traveled declined when compared to Q1 2007.  

This is no coincidence.

The TOTAL availability of liquid fuel BTU's has fallen in the U.S., and this trend will likely accelerate for the next several years.  Less liquid fuels = less vehicle miles traveled ("VMT"). Simple like that.

So how can the economy resume its growth pattern if little Suzie can't cruise to the mall and drop a hundred bucks on future love handles and saddle bags along with some worthless chachkas?  If we drive 1% less don't we consume 1% less tire rubber, roadside food, and healthcare for car accidents?  Care to guess what the decline in VMT will be for 2008 over 2007?  I will bet closer to 2% - and then it gets REALLY interesting.  Just think what the economy will look like in 2010 with a drop in VMT of 10% compared to 2006.  Life will go on, as long as you are not a financial or real estate professional.

Look out a little further and electricity rationing comes firmly into view.

Yours for a better world,

Mentatt (at) yahoo (d0t) com

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