September 30, 2007 (LPAC)--The Wall Street Journal took time on its front page on Sept. 29 to contemplate a U.S. economy under $100 per barrel oil. For years everybody from George Shultz to Joe Stiglitz, and including the WSJ, has been shrill about the need to free the nation from the probability of economic devastation caused by over-dependence on foreign oil susceptible to price volatility. That was one of the big arguments for "energy independence" and homegrown fuels by the neocons. At one time, $80 a barrel oil was unthinkable. Now, as oil moves toward $90 per barrel, the WSJ says "hey, it won't be so bad."

The WSJ, in a blatant attempt to condition its readership to the inevitability of catastrophic oil hyperinflation, is peddling the insane idea that the U.S. can prosper under $100 a barrel oil (Hey, we've done it so far, and we're almost there!) All that is required is that the increase must happen slowly, while inflation is held in check. And, the oil-producing nations must continue to cheerfully plow their profits back into U.S. investments.

The Journal cites the Wal-Mart effect for the miracle they foresee: "For every extra dollar taken from drivers' pockets at the pump in the form of higher prices in recent years, low-cost exporters from China and elsewhere have put roughly $1.50 back in the form of cheaper retail goods." Apparently, in an extreme case of the unseen hand guiding the markets, high oil prices are being converted into cheap goods at better than 100% efficiency.

With oil prices having reached up to $84 a barrel during trading days over the past two weeks--$100 a barrel is not far away. While the WSJ spins this tale of fantasy, there is no mention of the onrushing collapse of the financial system.