What are we likely to see when world oil production peaks and supplies begin to decline?
Gasoline prices will range between $5 and $10 per gallon. As a result, the resale value of SUVs, motor homes and other gas-guzzlers will plummet. In the 1970s the resale prices of Lincolns and Cadillacs fell, as gas prices rose. Currently with prices of $2.50 per gallon, SUVs are piling up on dealers lots and rebates are escalating. General Motors forecasts they will lose $1.50 per share for the first quarter of 2005. Their corporate bonds stand just one notch above junk bond status. Gas price increases in the 1970 also caused declines in house prices in the suburbs and rising prices for homes closer to jobs. Homeowners beyond half an hours drive from significant employment will be in the most trouble. High oil prices will also increase inflation. This will raises interest rates, especially mortgage rates. This will make it difficult for people to move. Homeowners with fixed rates are only forced to pay higher mortgage rates if they move and sell their home. Once the oil price impacts
