Is a Oil Price Driven Inflation Crisis Coming in 2011?

Oil prices have been on the move, today spiking at $91.13 per barrel. Cold weather, declining supplies and commodity traders looking for stores of value have all driven up recent prices. Most sources believe that oil will  move above $100 /bbl early in 20111 and some believe we could see $150 /bbl this coming summer.

Zerohedge says each $1 increase in oil prices reduces GDP by $100B AND each penny increase in gasoline prices reduce consumer disposable income by $600M. Since the Obama regime won't allow drilling in the US, most of the $5.9T will be imports, therefore a huge drag on the US economy by summer. And consumer disposable income will drop by $60B. So much for any economic recovery in 2011.

I'm paying right at $3/gal for gasoline today and will pay over $4/gal if oil rises to $150 /bbl. My monthly commute bill will increase to $375/mo if this scenario plays out like it did in 2008.

Expect farmers, grocers and other retailers to pass the increased fuel costs on this time around. Any recovery will generate huge price inflation. Wages will remain flat with un/under-employment running at 20%. This round of inflation won't scour fat, it will eat meat and bone. By Fall 2011 we'll be in a crisis if this scenario plays out.