So what's next?
If, and its a BIG IF, my assessment is somewhat correct and Algeria or Iran (or both) join Libya then Oil is well above $150, at least for a while, and the U.S. economy gets smushed... along with the stock market, the housing market, the banks, employment... because the rate of change is simply coming to fast for these markets to adjust. Just think about what $150 Oil and 5% less of it means, for: FedEx, UPS, Ford, GM, GE, American Airlines, Boeing, etc...
I wouldn't buy a boat or a Winnebago at the moment, they will nearly free in the used market sometime soon... speaking of which... this would be an excellent moment to reflect on the theory that "the best things in life are free"...
The contraction in the economy this go around will be more dramatic than last time IF (BIG IF) the price of Oil stays high over a longer period of time. In 2008, Oil spent a few months over $100... this might be somewhat different.
The political ramifications of this are significant, too. Not just for Obama who simply won't survive it (unless the Republicans run Palin) but for all of the incumbent leaders in the West. The good news is that we can finally end the debate with the Keynesians and the Tax & Spenders... they are very dead in all of this - only adults will remain, although many folks won't be happy about it.
And this is just the warm up... cause if the Kingdom of Saudi Arabia goes - Holy Smokes! Oil could easily top $300 per barrel, with retail gasoline about $10 per gallon... think about that. Snap! The end of everything you know in a matter of days... this would be an excellent time to do that which you think you should, as there will be no more warning for Saudi Arabia's implosion than there was for Libya's implosion.
More soon.