Monday, December 06, 2010

Ding, Ding, Ding: Oil Prices!

Just a heads up: Oil prices are rising.

Remember back in the good old days in the 2000's when we had all those consecutive quarters of 3%-plus GDP growth? It does seem forever ago, but at that time the good times were creating demand for energy. And, energy prices increased.

Supply-demand. Oh, and falling US dollar, too.

Anyway, the US economy is improving. As crazy as it sounds, things are getting better. Trust me. They are.

(Must be all those weeks of unemployment insurance kicking in, eh?)

So what's happening? Oil prices are going up. And (as Bob Brinker calls him), "The current occupant of the White House" just signed legislation banning new off-shore drilling.

Sweet! Nice timing. No new domestic supplies of oil. What could possibly go wrong?

What's likely to happen is that inflation will tick up at least a little, just as demand for energy increases.

Excellent column. This will be like a tax. Your transportation costs will increase.

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