Radical Noesis - Thinking outside the box

Unless the steadily increasing prices causes a significant economic crash (in which case all bets are off), I think we are heading for a series of mini-crashes. I had originally thought that gasoline prices in the U.S. would hit $3 a gallon sometime late fall or early winter. I now think that could happen late summer or early fall. That means they could be even higher than $3 a gallon this winter.

I think there is a changing pattern in steadily increasing cost of a barrel of oil. It is still steadily increasing, but it is not falling back the way it has done in the past. Instead of peaking and decreasing by several dollars, it is now peaking and decreasing by pennies (or quarters). That is not a good sign, though the trend over the last couple of weeks is too short to try a reliably discern a pattern.

Of major concern with the increasing prices is the cost of other petroleum products - particularly heating oil and natural gas. These are following the same (or larger) increases than gasoline, and will hit folks hard as the hot days of summer turn into the cold days of fall and winter. Not only will heating fuel be much more expensive, many people are just not going to be able to afford it. It could be a very hard winter for folks. Even those who can afford the increased heating costs are going to be strapped for cash for other things.

Along with the increasing cost of petroleum, we are also having climate woes. While this affects a lot of areas of our lives, of particular concern is the food supply. Drought in many regions of the planet, along with steady rains and devastating storms in others, is going to hit folks in the pocket and the stomach. Olive oil for example is skyrocketing because of the drought in southern Europe. When you combine the weather's impact on crops with the dramatic increase in oil, there is only one place for food prices to go - up.

Thus far, in the U.S., proportionate increases in food costs have not started. There have been some increases, and olive oil (as mentioned above) has already started rising dramatically. As previous year's crops start leaving the shelves and being replaced by this year's, I believe that costs will start reflecting the increased petroleum costs - and decreased availability.

Here are my recommendations
Buy staples now if you can afford to. I don't mean buy a year's supply of food, or strap yourself for living expenses. Simply try to buy non-perishable (or relatively non-perishable) items now - beans, flour, sugar, oil, canned goods etc.

Save some money back - if you can. Budgets will crumble under increased energy costs. A few bucks reserved would be a good idea, and if I am wrong, you can splurge on whatever holiday you celebrate.

If you are dependent on heating oil for heat, or if your electricity comes from oil fired sources, I'd recommend trying to get some sort of space heat that doesn't depend on that source. A small propane heater might be a good idea (and go ahead and buy the propane while you are at it). The thought of folks freezing in their homes because they can't pay their heating bills gives me night mares. I'm not saying remodel your house - just have some emergency source of heat.

You might think about car pooling or taking public transportation. Connect with people in your neighborhood, or at your work/school. I have a feeling people will be more open to this idea as prices edge up to (and above) $3 a gallon. Besides, you can take the money saved that way for other things.

What if you have limited resources? (This is the case for most of us.)
My biggest concern is that folks don't freeze this winter. If you can't afford food, we do have some infrastructure to help in that area. However, Bush's budgets have decimated heating programs across the country. I would recommend a trip of second hand stores. Get some extra heavy clothing and blankets (old sleeping bags). They are "off season" right now and so cheaper than usual.

Find friends, family, neighbors, who aren't reliant on heating oil. Make arrangements to go there in an emergency. Or, go in with some of those same folks to get an alternate heat source, and get together in an emergency.

Caveat on space heaters PLEASE BE CAREFUL. There are all kinds of hazards with space heaters - even electric ones. Electric heaters can over-heat the wiring in your walls and start fires. Propane and kerosene heaters use a flame (which can cause fire) and burn the oxygen (as well as release carbon monoxide). Do not shut yourself in without air circulation with a burning heat source. Small children are also likely to end up playing with or falling into portable heaters. Be Aware and Beware.

When gas prices hit $3 a gallon, that is not where they are going to stop. They may come down some, but they will start up again. The problems on the horizon are not a "blip," and then we will return to "normal." We are entering the territory of the unexplored with virtually no preparation on societal levels. But let's get through one crisis at a time. My current concern is the coming winter.