Gas Prices

<---Old and Busted -- New hotness----->

ABC News is reporting that

"if oil prices don't retreat, gas prices could reach $3.50 or $4 a gallon by next summer."

Which begs the question. How high will it go? Another question: When will people stop making little trips to places they might otherwise be able to walk to?

What's your price threshold?

No, really, write in with your answer - I'll post 'em!

Me? I think gas will have to hit between 7 to 10 dollars a gallon before people really stop and consider "Was this trip really necessary?" A period catchphrases sprinkled throughout the golden-age Warner Brothers catalog. You might remember "Was this trip really necessary?" (World War II gas-rationing PSA)

At 7-10 dollars a gallon, you no longer have cheep food.
Without cheep food, we're in deep trouble.
This is one of the best things that America has had going for it since WWII.

One could argue that the food itself will still be, gallon for gallon, still easy and cheep to produce - but the shipping involved is what will raise the price. Have you noticed the price of milk lately? Simple economics says that the folks in Minnesota won't be having orange juice if the cost to ship it is over fifty bucks.

This simple explanation also works for Coca Cola - and why there are local bottlers instead of Coke trucks shipping straight from Atlanta. Same with Wal-Mart. They build the distribution center, and the stores are carefully planned out from the logistical hub. Too far from the hub? No Wal-Mart.

But if all the goods are too expensive to ship - you're going to eat it in inflation.
We're still pretty far away from 7 dollar gas... but it's past the horizon line of believability.