>Really? Here in California gas had been over $3.00 p/g steadily for
>nearly a month, and last week it just fell back below that benchmark.
>We're that close to the "breaking point"?
Every time gasoline has spiked like this, there's been a recession. A complicating factor is that prices for refined products have risen much more than underlying crude prices (in earlier spikes, like 1974 and 1980, it was the reverse). Still, with energy prices up strongly (and natgas is up like crazy too) and the Fed tightening, it doesn't seem outlandish to expect a recession, or a near-recession, in 2006. I don't know if that qualifies as a "breaking point" though. But I suspect the Fed may be trying to engineer something like a recession, to burst the housing bubble and get energy demand down.
Doug