Solutions for Self-Reliance

The Transportation TAX is Going UP (again) Watch Out

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Here’s yet another reason you should be living in a networked resilient community and telecommuting to any “outside” work:

The “transportation tax” is going UP.  Again.

Here’s the gory details.  Gasoline prices are on the rise again (you can get more data and charts from gasbuddy.com ).

As you can see from this chart, the drive towards ever higher gasoline prices has been steadily upward for years.  Why?  The three horsemen of our centralized energy market make it inevitable:

  • depletion (Peak Oil),
  • disruption (Nigeria/Iran), and
  • development (China/India/Brazil/Russia).

You can also see from this chart above that the only counter to the three horsemen in our centralized economic system is a recession or depression.  Why?  From now on, oil prices will only go down (reversing the trend to go ever higher) when we destroy economic activity.

How does this work in practice?

The last time we hit prices this high, it drove American households into failure mode.  American’s currently spend 15-20% of their declining gross incomes on cars.  So when gasoline prices went up in a pattern very similar to what we see today (like the heat map below), they began to cut corners.

 

How do people, particularly Americans, cut corners?  They cut back on everything except for their cars.

When that happens, mortgages and lines of equity credit will go unpaid, leading to financial retrenchment, a recessionary cycle, and eventually financial panic.

Unfortunately, it looks like we are headed in that direction again.   Even worse: this next downturn may be contraction that takes us into a full scale and long term economic depression.

So, let’s keep up our effort to build resilience into our communities, our homes, and our thinking.  We may need it sooner than later.

 

Your ever hopeful that we can circle the wagons before things get ugly analyst,

 

John Robb

 

 

 

 

 

 

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