With thanks to Stogie of Saberpoint for the graphic below:
Stogie's post is HERE.
Get ready for America's economy to hit the skids and squeeze us all until our belly buttons rub against our backbones (gasoline prices now higher as the excerpt below is dated April 21, 2011):
Killer Combo of High Gas, Food Prices at Key Tipping PointMore HERE at CNBC.
The combination of rising gasoline prices and the steepest increase in the cost of food in a generation is threatening to push the US economy into a recession, according to Craig Johnson, president of Customer Growth Partners.
Johnson looks at the percentage of income consumers are spending on gasoline and food as a way of gauging how consumers will fare when energy prices spike.
With gas prices now standing at about $3.90 a gallon [What is the price right now where you live?], energy costs have now passed 6 percent of spending—a level that Johnson says is a "tipping point" for consumers.
"Energy is not quite as essential as food and water, but is a necessity in today's economy, and when gasoline costs more than bottled water—like now—then it takes a huge bite out of disposable spending," he said, in a research note.
Of the six US recessions since 1970, all but the "9-11 year 2001 recession" have been linked to—of not triggered by—energy prices that crossed the 6 percent of personal consumption expenditures, he said. (During the shallow 2001 recession, energy prices had risen to about 5 percent of spending, which is higher than the long-term 4 percent share.)...
"The combined increase in the necessities of food and energy creates a harsh double whammy for already stressed consumers," Johnson said. The last time this happened was in the recession that lasted from 1973 to 1975.
Johnson estimates that food and energy eat up about 15 percent of consumer spending at today's prices, compared with about 12.7 percent two years ago.
Of course, at lower income levels, these percentages are much higher....
When gas prices climbed in 2006 under the Bush administration, George W. Bush got the blame.
Where is similar blame for Obama now as gas prices continue to soar?
And what will our heating bills in the Northeast look like when cold weather arrives this fall and winter? The price of oil will affect those heating costs, too. The pain at the pump is just the beginning of the economic damage soaring oil prices cause!
Apparently, the American people weren't listening back in May 2008 when Obama said:
“We can't drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times ... and then just expect that other countries are going to say OK. That's not leadership. That's not going to happen.”America, you had fair warning. But you voted Barack Hussein Obama into office anyway, thereby promoting the elimination of the middle class.