What if Oil Hits $200?

Inflation would skyrocket as American society reorganizes
By Kevin Spak,  Newser Staff
Posted Jun 28, 2008 3:35 PM CDT
A woman counts cash after putting gas in her Cadillac Escalade full-size SUV at a Chevron station in Santa Monica, Calif., Friday, June 27, 2008.   (AP Photo)
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(Newser) – Wall Street has predicted $200-per-barrel oil for months, but what if it really happens? Not only drivers would be hurt by such a spike, the Los Angeles Times reports: Inflation would skyrocket as oil-derived products turn pricey and "the purchasing power of the American people would be kicked in the teeth so darned hard that they won't have the ability to buy much of anything,” one energy expert predicted.

Automakers and restaurants would suffer the worst. But such high prices would also reorganize American society, making proximity more valuable. Home prices would swing depending on the commute they create, and companies would likely consider de-centralizing operations. “It would be the urban-planning equivalent of an earthquake,” one LA councilman said.