Dependancy: The USA, the western world, North and South America, and like many nations of Europe and Japan, are highly dependant on oil. I recall as a kid in the 1950s seeing gas prices at 5 cents a gallon. I remember my parents getting bent out of shape when gas finally reached 11 cents a gallon.
1971: My wife and I traveled to Southern California to visit friends and family. Gas in Northern California was about 15 cents a gallon. But, lo and behold, we saw gas in Los Angeles at discount station for 8 and 9 cents a gallon ... during the good old days of gas wars.
1973 Then President Nixon had taken the USa off of the Gold standard, and the US Dollar was floating in the currency markets -- and inflation started moving up -- and the oil embargos happened in major cities. Gas jumped from an average of about 21 cents a gallon to over 35 cents a gallon, and by 1974-75 reached 50 to 55 cents a gallon - surely Armageddon was just around the corner!
Relative to Inflation: A average 3 bedroom 2 bath house in the late 1950s costs about $9,000. Today, the same house is about $190,000. Or, inflated in 40 years by 2,100%. Also represented as an average of 7.65%. Of 9 cent gas had risen the same in the 40 years since, it would average today at $1.90 per gallon. But, today in the Chicago area we are seeing $1.18 at the name brand stations, and somewhat less at the discounts. In Iowa it is about 95 cents, and in Texas which exports oil, it is also in the 90 cent range. mmmmm.
Why is gas so suddenly cheap? The OPEC nations have cut production to try and keep the price stable, but it keeps dropping! Why? Our lovely friends to the south - Mexico - and our new commrade - Russia - have increased production, and caused oil to drop on the spot market. Yes, indeed, the Arabs are not the only folks in the wolrd with lots of oil, black gold, texas tea!
What might be an interesting twist? If we can enhance technonolgy to reduce dependancy on oil, increase oil production from non-Arab sources including our own Alaska, and employ some conservation methods, and continue to conversion to burning methonol - a corn based renewable product, then we just might pull off the great act of telling the Arabs that we don't need their oil anymore.
Without major oil revenue, the increasing wealth of that part of the world would begin to stall and maybe reverse - and then the terrorists, like spoiled rich brat Osama bin Laden would not be able to afford to buy any war toys to advance his maniac views of life.
Just a thought. - Amazing