Oil prices made their biggest single one day gain ever on Friday to almost $139 a barrel up $11 for the day on top of the $5.50 increase on Thursday.
The US government reported the nation’s unemployment rate zoomed to 5.5 percent in May, a monthly rise of half a percentage point, the biggest in 22 years.
One analyst predicted a barrel of crude will hit $150 by the 4th of July.
It was back just six weeks ago on April 23, when we blogged that gas was going to blow past $4 and hit $5 a gallon.
Now in hurricane season, it would only take a threat of a storm, in the gulf to send gas prices to $6.
An storm that hit oil rigs in the gulf or any refineries in Texas, well you would be looking at $8 or more.
This certainly is not just a US problem.
In France, a gallon of gas runs nearly $10.
Turkey, it’s more than $11.
In England last week truckers protested diesel prices over $11.
The price of gas of course effects everything you buy since everything is shipped in from somewhere.
The rise in oil has created across the board increases in food, clothing, all products.
A couple of weeks ago, Dupont which products are used to make thousand of products announced a 20% across the board increase do to price of oil.
And airlines and their passengers, well there just screwed. Remember the big stink a few weeks ago about the guy that had to sit in the rest room on JetBlue? Soon they will be selling that seat. Pay toilets on the plane, you think that’s not coming. The airlines are cutting back flights, retiring planes, firing people, so if you have to catch a flight expect to pay plenty. Less seats, higher costs, not a good mixture for the traveling public.
The world is driving more than ever: There are 887 million vehicles in the world, up from 553 million just 15 years ago, according to London consultancy Global Insight. It estimates the figure will be 1 billion four years from now.
Americans are already driving less, about 11 billion fewer miles in March 2008 than March 2007, a drop of about 4 percent, according to the Schork Report newsletter. It was the first drop in March driving in almost 30 years.
So has the economy fundamentally changed. Or is this just a spike in prices?
we think the change has occurred.
Although oil will fluctuate like any market, demand is going to continue to increase and the lowests we may ever see gas again in our lifetime is $3. More lightly we are going to see $5, $6, and eventually $10.
This is going to further squeeze the lower, and middle class and even some higher earners.
If we get continued increases in costs, inflation, coupled with more unemployment reduced spending, little to no growth in the economy, we get the dreaded stagnation.
So if this is the new world economy, what does it mean for our industry?
The trend of the last 30 years of people moving further out away from the center of town to get more land or a bigger house, will be gone. People will relocate closer into the cities, closer to work, shopping and activities.
People will travel less, working from home will increase dramatically, and the internet will become an increasing source of providing services, social gatherings, entertainment and for the purchase of goods.
Will people who will hardly be able to afford their mortgage payment, gas bill, car payments and food, be spending $100 to take their family to the movies, plus the $10 in gas to get there? No
More time at home, more time on the net, more use of the net. By those who have grown up with it and for those who have nevered used it. And not just in the US but all around the world.
Finally people will come to the realization that their storefront business will have to close and get online to conduct business, as people are not going to get in their car and drive around looking for stuff to buy, and it they do there going to a discount club, Walmart or Target.
All of these businesses that will migrate online will need an Internet presence, starting with a good domain name.
Therefore we see this as the next Internet boom.
Domain names needed for online businesses.
Those we got.
So $6 dollar a gallon of gas may not be such a bad thing if you got the domains.