Oil prices creeping towards $100 tipping point

The price of oil is creeping ever so close to that not having money for anything else $100 per barrel price. Once that number is hit, there will be both psychological and economical fallout as people close their wallets out of concern and necessity.

Looking at the sluggish economic recovery and understanding why it is so sluggish, once again all the dots, arrows and GPS trackers point to the price of oil as the culprit. Looking at the average US household and doing some quick fuzzy math, you will find that after the oil related bills have been paid, there is not much left to pour into the economy for general purchases.

$100 per barrel will have the same psychological impact as a 10,000 Dow Jones average in the stock market. That extra zero is significant visually in that the number is longer, and as shapes play such a huge role in the subconscious mind, things will suddenly change with an instinctual reaction. Where a longer number in the stock market is positive, a longer number for the price of oil is not and it stimulates the survival instinct to conserve and ration.

Admittedly the $100 tipping point may have modified slightly over the past year or so, but only by a few dollars at best. But the psychological impact is much more significant because it requires no math or calculations to see that extra zero. With people’s memories of $147 per barrel fresh in their minds, that $100 tipping point will be significant. Making choices based on survival and not just being inconvenienced is still in short term memory for many.

So once again the urgency is renewed and with the Republicans once again controlling the House of Representatives, there is a formula for deep political wounds as it was their long term plan that caused the US addiction to oil as other countries moved ahead. The question remains what will they do as they may be forced to bite the hand that feeds them being contributions from big oil and other technologies of the last century.

Politically this may end up being a case of what goes around comes around for the backwards thinking Republicans. They will be placed in a choice of taking care of the people, or taking care of big companies. As night can not exist during the day, they must choose and decide who to abandon. Certainly they will try to wiggle and get out of it, but as the saying goes, it is the house they built so they must live in it.

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