I think it's going to be a bleak Christmas this year. Looking ahead in the economy, I think that the higher and higher cost of oil and gas is going to suck some life out of our economy. In March, leading economic indicators sank sharply. Inflation (without energy costs included) remained stagnant, but the Fed continues to raise interest rates, which keeps raising the cost of borrowing money, which will make it harder to businesses that have thought about expanding to do so.
I also think that in some areas jobless claims are going to rise, and the price of everything will start to climb as transportation costs continue to inch upward.
Not only that, but Hugo Chavez in Venezuela keeps rattling sabres and claiming that we are planning to invade him and unrest continues in Nigeria, which will make oil investors even more nervous, causing them to buy more to hold in reserve, which will again push up the cost of gasoline at the pump.
One of the only bright spots is that some refinery capacity in the Gulf is coming back on line, which should ease some of the demand pressure we're under.
I guess I'm just cranky and tired, but I keep thinking that in the US, this is going to make for a more unmerry Christmas in 7 months.
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