Gas prices in the Unites States and around the world are at record highs. Here in Southern California, the average price for regular gas is around $4.50 per gallon.
Like a lot of things, there are highs and lows. The economy will have good years and bad years, the real estate market will go up and down, everything has a cycle. However, I think the cost of oil and gas is different. I'm not saying that the price of gas will never go down because it eventually will. What I am saying is that the days of cheap gas in the United States are over forever. Booming economies in China, India and elsewhere as well as eventual diminishing oil supplies say so.
Even so, it is truly amazing to hear the Chief Executives of General Motors and Ford state that we are seeing a "permanent" shift away from large vehicles in the United States. Except during a very brief period in the early 70's during the Arab Oil Embargo, big cars in the Unites States has been a fact of life, almost like a Constitutional or God-given right.
It's not entirely a bad thing of course. It is these market driven forces that are finally getting Americans to give up their huge polluting, green house gas producing monsters.
Unfortunately there are still several large nations that are not allowing these market forces to naturally encourage their citizens to buy more fuel efficient vehicles and to conserve. In China, India, Mexico and several other nations, the government subsidizes gas for their citizens. In China and Mexico, they still pay less then $3.00 per gallon of gas, therefore distorting the natural market forces that otherwise would encourage conservation. This has the added effect of driving up worldwide demand for oil even more and causing some of the increase in fuel prices. People who live near the Mexican border in San Diego are increasingly driving across the border for cheap $2.50 per gallon gas. Not exactly encouraging conservation. China is one of the few countries where the sales of large vehicles is actually increasing.
I take the subway to work here in Los Angeles. I can see first hand the effects of the high gas prices. The trains are a lot more crowded.