Why $150 Crude Oil Won't Matter (And Why $200 Crude Oil Won't Matter, Either)

Crude oil crossed $130 per barrel last week, taking gas prices along for ride. Over the last 90 days, unleaded gas is up 25 percent and appears to be heading higher.

Americans are battered by higher pump prices but are still living their lives. Unfortunately, the mainstream media throws salt on the gas price wound as often as possible.

In fact, with respect to gas prices, there's a lot of crazy talk in the media right now -- about how Americans are going broke; about how the global economy is off its rails; about the need for government intervention to protect the people.

And, it's very easy for laypersons to feel panic about the situation because media personalities can be very convincing.

Thankfully, there's Google to provide some perspective.

Since oil first crossed $30 in 2003, the media has spouted Gloom-and-Doom each time that oil crosses a milestone number. Its calls for economic demise have yet to be correct -- even though oil has more than quadrupled in cost since 2003.

Let's look deeper at milestone oil prices and the corresponding newspaper headlines since 2003 to see this in action.
• 2003: Oil at $30 per barrel. Recession is feared.
• 2004: Oil at $40 per barrel. Fault the war.
• 2005: Oil at $60 per barrel. More recession fears.
• 2006: Oil at $70 per barrel. Household budget worries.
• 2007: Oil at $80 per barrel. Housing is the big worry.
• 2007: Oil at $90 per barrel. Recession is likely.
• 2008: Oil at $100 per barrel. Economy heading to the "Danger Zone".
• 2008: Oil at $110 per barrel. Blame the Fed and the weak dollar.
• 2008: Oil at $120 per barrel. Inflation is likely.
• 2008: Oil at $130 per barrel. Inflation is really likely.

I'm not saying that the media is wrong -- I'm only saying that we've heard about this "oil crisis" before and the scary headlines are old hat.

Gas prices reach new, all-time highs every day. We've dealt with it before, and we'll deal with it now. Americans are as indifferent to $4.00 gas as we were to $3.00 gas last year. We'll complain, but we'll move on.

And when it costs $5.00 per gallon later this year, we'll adapt then, too.

The U.S. economy won't crash from rising gas prices -- despite what the "experts" tell us. A more practical threat to the economy will come in the form of something unpredicted -- a black swan -- because shocks to the system don't get absorbed into the economy the way that slow drips do.

American consumers are resilient. Just look through what we've persevered so far:
1. The housing decline
2. The credit crunch
3. Speed Racer

We'll get through high gas prices, too.