I suspect we will get $4.00 gas and burgers without further assistance. The recent Obama-Republican deal is a trillion dollar Stimulus II, and should have this result without Bennie. Bennie will hold QE III in case China or others choose to hold us up with the selling or threat of selling their holdings of our debt. QE2 may indeed have had a "note-to-China" purpose. QE2's rate increase may also have been a "note-to-Bennie" warning that he is out on a limb dangerously close to the reach of the financial wolfpack.
Another reason for $4.00 gas is the absence of new drilling permits silently undermining the public statement from Salazar that we can resume oil exploration and production. Salazar is another professional politician for the first time running something larger than a committee meeting and which has real-world consequences besides embellishing or embarrassing Salazar. BP was an embarrassment, compounded by his own "boot-to-the-neck" rhetoric, probably capped by a phone call from a Coast Guard Admiral informing him who was in charge of the oil spill response.
MMS has to write the environmental impact statement for every application, and was churning out an 800-average page count statement that was reviewed by NOAA, then challenged by the green lawyers paid to do just that. After BP, the content of such has to be even more extensive to pass internal review in addition to a re-invigorated subsequent challenges--and jut what these new requirement are or will be must be decided before all applications can begin to be processed anew.
Energy has grown from 6% to 10% of GDP, and appears to be accelerating without anyone able or willing to make a difference. Most are probably either obtuse to their potential impact--or in favor of it.
The last time transport fuels reached $4.00 per gallon, the roads became comparatively empty and the economy dipped. We will shortly find out whether this $4 price intolerance still exists, has risen, or, because of economic tenderness, may even have shrunk.
Power generation has a parallel story of impediment without solutions. Over 100 new coal-fired stations have been canceled or indefinitely delayed because the President personally said they were free to build them if they want to go bankrupt. If cap-and-trade goes into effect either through law or administrative fiat, which EPA has stated they are determined to do, coal-fired power will double in cost, meaning average power cost to the consumer will increase about 50% since coal-fired power is 50% of our power generation--and the cheapest per kilowatt hour.
Energy is not just a convenience; it is the basis of civilization and should these "leaders" take down energy economics which it appears they are doing, determinedly or inadvertently, we will realize at least great Depression II--if not Dark Ages II.
