In ancient times, when mapmakers came to uncharted territory, they would scrawl: “Here There Be Dragons.”

Flash-forward to the 21st Century; oil markets went into uncharted territory on the charts last week. Friday’s dramatic spike up was the biggest one-day move EVER. Morgan Stanley now predicts that oil prices could hit $150 per barrel by the 4th of July.

The dragons are coming to dinner. Are Americans on the menu? More specifically, are you? Today, I’ll answer those questions and more.

Let’s start with …

How This Crisis Differs
From Past Oil Spikes

If you remember the last two oil crises — in 1973 and 1979 — you might be thinking: “well, these things end eventually.”

Maybe so, but there are big differences between then and now….

Source: Mineweb.com 06/09/2008
Since the onset of the so-called supercycle, around early 2002, commodities have increasingly gained the reputation of being a hedge against everything - except, now, so it seems, commodities.

In the past few days, crude oil prices have surged into unchartered territory, close to $140 per barrel, closer to an as-yet unknown “choke point”, where oil will demonstrably unleash serious damage on the global economy. Today’s oil prices are the highest - in inflation-adjusted terms - seen since the 1860s, an event that triggered the Pennsylvania oil boom. In the modern era, oil crises were seen in the mid-1970s, when prices topped $45 a barrel in today’s money, and then $90 a barrel in the early 1980s.

In their most modern manifestation, commodities have also increasingly emerged as a separate asset class, and, when seen as a “hedge against everything”, offer indirect exposure to emerging markets industrialization, …