Originally Posted by Poguemahone
I've said this before, but since consumption is going UP while prices also go up, it suggests to me that oil/gas is underpriced as a commodity. Severely. Basic market economics tells me so. Either that, or market pricing no longer applies to this particular commodity-- in effect, everyone thinks they must have it, so the producers can charge whatever they like...
And no, I have no idea what the tipping point, where people begin to consume less because the price is to high, will be (or even if there is one).
Yup, gas has been an under-priced commodity since the early 1990's. Americans will not alter their driving habits until the price of gas surpasses the $3/gal level. Even at $3/gal, people will not cut back on their driving -- buying smaller/fuel efficient cars will be the response to higher fuel prices. The majority of Americans will not drive less, will not move from the X-burbs to a town closer to their jobs, will not use mass transit and,
most certainly, will not take up biking as a form of transportation.
The average American will be glad to see the neighbor's kid sent off to some third world hell-hole, to be blown to bits by an IED, before they will accept any change in their lifestyle. That's the fact of what it is folks.