Falling gas prices in Idaho could be a mirage

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You’ve probably noticed it on your way to work and walking past gas pumps. There is a sudden drop in prices per gallon in southern Idaho. Is this the start of a trend? Probably not. This is potentially linked to fears of a collapse in the Chinese economy. Several large government-controlled real estate companies are on the verge of insolvency. China’s economy, the second largest and most dynamic in the world, could take a face factory.

There are comparisons to our economic collapse and the “Great Recession” that followed. In the summer of 2008, gas prices in much of America were above four dollars a gallon. At Christmas I remember buying regular unleaded for forty dollars a gallon. This is because the oil market has sagged alongside the economy.

We could go from one extreme to the other

Here is why the Chinese situation could have an impact in the short term. If the Chinese government seeks to distract its people, the invasion of Taiwan will be advanced sooner than expected (that’s an opinion). If this happens, the oil market will contract faster than Bill Shatner’s sphincter when it is launched into space.

The necessary oil investments are lacking

Even if China postpones an invasion, there are forecasts of much higher costs per barrel along the way. Halliburton warns that it has not been necessary to invest in new wells as the world emerges from the pandemic. OilPrice.com calls it global scarcity.

I still have an old bicycle for emergencies. Granted, I’m not in shape and using it to go to work in the winter and before sunrise has little appeal. My choice is a bicycle or some other household expense will have to go. If we make all of these choices, the entire global economy will be headed for a downturn.

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