The scramble for good life has created unmanageable environmental problems from Amazon to Yangtze. It has created mass movements of people from countryside to cities. The demand for resources is an underpinning cause of conflict from water issues in Middle East to land issues in Africa. And, it's reason that Americans are paying higher prices at fuel pump.

A good example of increasing demand for oil is People's Republic of China. They are now third largest oil consumer, behind U.S. and Japan. In recent years, China has been undergoing a process of industrialization and is one of fastest growing economies in world. With real gross domestic product growing at a rate of 7% a year, China requires increasing amounts of oil to sustain its economic development. Its oil consumption grows by 7.5% per year, seven times faster than U.S. This model is repeated with lower growth numbers for countries from India to Taiwan. Without a Recession, demand for oil will continue to grow at least at present rates into foreseeable future.

The demand for oil exceeds long-term oil supply. Nearly 2/3rds of world's known oil reserves are found in 5 countries on Persian Gulf: Saudi-Arabia (25%), United Arab Emirates (10%), Kuwait (9%), Iran (9%) and Iraq (10%). There is little prospect of finding massive new oil reserves. Most petroleum experts believe that known oil reserves will decline from present levels. Thus, OPEC has little incentive to increase short-term production to offset sustained global demand for oil. The oil OPEC sells is unlikely to be replaced with new reserves.

Fifty-dollar oil means more than three-dollar gas prices at pump. Farmers need oil to produce crops. The goods we purchase must be moved to stores by trucks that require diesel. Higher oil prices means a higher inflation rate. A good rule of thumb to find real inflation rate is to take Government's Consumer Price Index (CPI) and multiply by two. The reason is CPI, like most Government statistics is heavily weighted to create a positive public perception of economy. The doubled CPI gives you approximate real inflation rate for year. For years, CPI has hovered around 3%/year. Most of business and financial community assumed a six- percent real inflation rate. Currently, U.S. Department of Labor projects a 4.5% CPI for 2005. This would mean a real inflation rate of 9%.

A fifty- percent increase in inflation means a thirty three percent reduction in buying, until buyers get a fifty percent increase in their incomes. Reduced buying means layoffs and a Recession. So salary increases are unlikely and thus a Recession is logical outcome of fifty-dollar oil.

The American economy drives world economy. An American Recession means a World Recession. In my opinion, that recession will be evident within next year or so. Be prepared for economic stress between 2006 and 2008 and probably longer. On positive side, American government will eventually regain control of Economic Illusion and we will eventually find ourselves comfortably wrapped in an illusionary security blanket. At least until American Illusion hits more reality bumps on yellow brick road.

Some Important Questions to Ask When Choosing a Credit Counselor to Handle your DMP:

1. What services do you offer? Look for an organization that offers a range of services, including budget counseling, savings and debt management classes, and counselors who are trained and certified in consumer credit, money and debt management, and budgeting. Counselors should discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems now and avoid others in future.

2. Are you licensed to offer your services in my state? Many states require that an organization register or obtain a license before offering credit counseling and debt management plans.

3. Do you offer free information?

4. Will I have a formal written agreement or contract with you?

5. What are qualifications of your counselors? Are they accredited or certified by an outside organization? If so, which one? If not, how are they trained? Try to use an organization whose counselors are trained by an outside organization that is not affiliated with creditors.

6. Have other consumers been satisfied with service that they received? Once you’ve identified credit counseling organizations that suit your needs, check them out with your local consumer protection agency, and Better Business Bureau.

7. What are your fees? Are there set-up and/or monthly fees? Get a detailed price quote in writing, and specifically ask whether all fees are covered in quote.

8. How are your employees paid? Ask them to disclose what compensation it receives from creditors, and how they are compensated.

9. What do you do to keep my personal information confidential and secure? They should have safeguards in place to protect your privacy.

Get information you need to make an informed decision.