The Return of $3.XX

While the purslane and brown rice is getting ready, I along with all the other 300 million Americans are breathing a sigh of relief! The return of $3.XX gas is right around the corner! Oil and natural gas futures are down! Way down!

A few good returns on how demand destruction is working its way through the Merikan economy and speculators are now short on oil. Speculators don't give a whit about the absolute magnitude of price; they only care that they are on the right side of its movement. They predict us curtailing use.

And apparently we've cut back 5%. That's actually respectable! And it wasn't due to any action on the part of the Franklin Monologues...it was the rest of you. I don't think public trans ridership, bicycling, or scootering to work had a whole lot to do with that 5%, it was likely we just simply stopped recreationally using oil.

My observation is that demand inelasticity increases as demand destruction progresses. That first 5% is easy to get; we air our tires, drive a wee bit slower, combine trips...all the shit we should have been doing from the beginning but were too lazy and stupid to do. 5% does not impact our lifestyles, outside of bringing energy to the front of our reptilian minds. The next 5% will be a lot more difficult; if it takes a 40% price increase to effect a 5% reduction, what price 10%?

And at $3.XX, we can fergettabout conservation!