Have you noticed the price of gasoline at pumps lately? It's getting to be pretty close to $3 a gallon for premium these days. That's still cheaper than most of rest of the world, but it's definitely going to be having a big impact over the next couple of years. California, in particular isn't the best suited place to deal with a oil crisis -- our lifestyle is so intertwined with cars that our modern habits have influenced greatly the architecture and planning of the cities we live in. As the cost of gas rises, consumer spending drops (mainly because people don't want to buy new big ticket items like cars), and inflation goes up.
Currently, China is in the middle of an oil crisis where they are exporting fuel out of their country because the prices are even higher.
What do I think? I think we're all going to be cursing the cars we drive as gas prices exceed $3 and head for $4, and until the time waiting at the pump equals the time wasted by public transit, things won't balance out.
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