Follow the money and you will quickly learn that when it comes to skyrocketing oil prices, and the subsequent aftershocks that rock any industrialized country, there are no ethics. The Fed policies of cheap money have created what is now becoming a world-wide liquidity crises that has been exacerbated by our society of entitlement, people clamoring to hop aboard the cheap money-train as it rolled into cities and towns, offering loans for homes most Americans could never really afford. So, buyers walked away from them.

Well, somebody has to pay for this unprecedented exodus and today we are doing so with $3.50 gasoline at the pump. How is this possible? The smart money is running away from paper investments and rapidly moving to commodities, including oil. The fact is, there is so much oil in the world as of this writing that tankers line up waiting to unload. Refineries are running at over 100% capacity and yet inventories are climbing, demand is beginning to drop, first here in the U.S and shortly other countries will follow this trend.

The bubble in oil prices flies in the face of traditional supply and demand principles, which in the end will win out-it is only a matter of time. The true litmus test of so-called peak oil and supply issues is real full-blown shortage, where gas lines form at pumps and rationing begins. Funny, since the time when pump prices went from $1.99 to $3.10 I did not really have any issues finding stations brimming with three different grades of fuel.

The dollar is worthless and investors have left the once solid, safe greenback in droves and are speculating that oil will reach $150 per barrel and their gamble will pay off in unheard of returns. The same goes for gold. I would surmise that by the time oil reaches $150 bbl and pump prices reach $4.00 per gallon or better, the U.S. economy will be forced into a major downturn. People will make the inevitable choices between the family vacation and keeping up with food prices. That new car will wait another two years and the washer/dryer in the basement still work, despite their age and will stay put a little longer. And, the biggest loser in this oil for butter combat zone will be the electronics industry. Big ticket items such as flat panel HDTVs, home theater systems, computers, games and the like will be passed over, in order to save those dollars to pay for fuel for getting to work and the additional costs for food and other goods delivered via trucks and

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