As I write this, the price of oil is threatening to sink below $60/barrel. That has me thinking about what will happen to all the new drilling that has started in areas where it is only financially feasible to drill when oil is trading above $100/barrel. In fact, new exploration spending is expected to decline 15% over the next year according to Petroleum News.

What does this mean to the much aclaimed oil sands of Canada and our own oil shale deposits? What does this mean to the huge finds in the very deep water areas? Will these all be too expensive to develop? And what does this mean to "Drill, baby, drill"?

I am beginning to think we will see another Petroleum Industry shake-out that may not be as large as what devastated Texas in the 1980s, but will nevertheless result in unemployed workers, abandoned houses and bankrupt companies. We are told this is because demand is down and the speculators are driving the commodity prices down. I am skeptical. Something tells me to wait until after the Election to declare the Oil Price Crisis over. After all, it is in the Petroleum Industry's interest to support the election of John McCain, and it could easily be done by dumping a little supply on the markets just in time to drive gasoline prices back under $3/gallon for the Election.

Gas prices are there now. Does that mean people will start buying Hummers again? Will Hybrids all moulder on the lots at car dealerships? Will General Motors stay in business? Will the Alternative Energy Industry be quashed? I am not so sure General Motors should stay in business but I sincerely hope people are smart enough not to abandon alternative energy development. Personally, I am hoping those cute little high mileage cars build up on the lots and go on sale! I have my eye on a white Honda Fit, and would like to make a good deal.

Lower gas prices should mean lower prices on groceries, but I haven't seen lower prices at the supermarket and I haven't yet seen trucks making as many deliveries as they used to. Inside the store I don't see shoppers with full baskets, either. I also don't see anyone driving around to the yard sales here in town on the weekends. And while the unemployment numbers continue to climb, I kind of doubt that lower gasoline prices will usher in a new wave of prosperity.

If the stock market falls to about 7800 on the Dow Jones Industrial Average, the market will have declined the same percentage amount as it did in the Great Crash of 1929. That means there is a lot of blood on the streets in terms of lost savings and retirement funds. This time around people won't be losing their bank deposits, their company plan pensions, or the cash in their brokerage accounts. However, the losses are in their 401-K plans and personal investment accounts. Even the very wealthy are hurt. On 60-Minutes, T. Boone Pickens admitted to losing $2-Billion and rumor has it that Buffet is down multi-$Billions as well.

Folks are pretty much broke. Lower gas prices help, but times are still going to remain difficult and will probably get worse. What will weigh heavily in the future will be the disasters taking place in foreign countries that depend on the United States as a consumer of their products or services. Even Dubai is having a problem with money as oil prices decline and US and European companies close their expensive offices and resort to meetings via webinar and conference call. Even China and India are experiencing serious declines in their growth, and this might prove to be a much greater problem than one would expect because their huge populations have become used to higher wages and being able to afford to buy consumer goodies like computers, cell phones, and cars. Disappointing these people, who have histories of violent civil uprisings, may prove disasterous.

I don't have the answers but I suggest asking questions and thinking about what the answers might be. It is one way to prepare for what the future might hold. It is also one way smart people spot opportunities, and opportunities will be plentiful for those who are aware.