Kick Up Your Heels and Celebrate Expensive Gas! - NBC New York

Kick Up Your Heels and Celebrate Expensive Gas!

Higher prices might mean economy's on the mend



    Kick Up Your Heels and Celebrate Expensive Gas!
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    Now here's a sight for sore eyes -- some good ol' overpriced gasoline.

    Good times are here again, America!

    Cast your mind back to the middle of the housing bubble, when everybody was swimming in riches and easily paid for their $750,000 homes with their $45,000 salaries, and they went on vacations to exotic places and never worried about money because their zero-percent credit cards had credit limits with more zeroes than the human mind could imagine. What was the one thing people could still be relied on to complain about? Gas prices, that's what.

    When times are good, gas prices go through the roof. A sizzling economy means greater demand for limited amounts of oil, which in turn means it costs you $50 to fill up the tank of your Mini Cooper. And the pain you feel at paying this outrageous sum is equal only to the pleasure in knowing that, thanks to the white-hot economy, you can always just roll your $50 gas bill into your adjustable-rate mortgage and pay 8.4% interest on it for 20 years.

    Conversely, the very cheap gas prices we saw earlier this year were kind of rad, in that it suddenly cost 25 cents to drive from Orlando to Boston, but frightening because it translated to a huge vote of no confidence from the world market. The economy was doing so poorly they couldn't give oil away.

    So, in light of all those developments, we should rejoice that gas prices have been rising for 50 days in a row. The economy's on the mend, green shoots and all that! Unless ....

    Oil prices have been driven higher as investors bet the world's once-robust demand for energy is poised for a rebound. However, many analysts say the recent runup is overdone, and that oil prices at current levels are not justified based on sound economic fundamentals.

    In other words, the good news is that gas prices probably won't get much higher. The bad news is the economy is still in the toilet. We get the worst of both worlds: moderately high gas prices, and no way to afford them. Smart investors are betting on bicycles.

    Petroleum geologist Sara K. Smith writes for NBC and Wonkette.