Gas Prices Are About to Push MILLIONS Over the Edge

[00:00:00]We all know that gas prices have been climbing and climbing and are seemingly going nowhere but up. And this is absolutely killing the American commuter. You know, a lot of people, especially over the past five or 6 years or so, trying to combat the housing affordability crisis, have moved to more affordable suburbs and more rural areas of the country because that's where it's easier to afford a home. And that was kind of the workaround in order to still be able to buy a house, but still be within maybe a 30 or 40 minute drive of your work. But now people are paying for that decision dearly because even though they're saving on housing costs, now they are paying like crazy on commuter costs. And today I'm walking down San Susi Boulevard here in Miami. And I deliberately chose this street because there's a ton of trees here and it is extremely hot. It feels like in the 100s today. We're getting this massive heat wave here. So, trying to stay cool. So, what's happening is all of the money that was once being saved on having a lower housing cost but a longer commute time is being completely wiped out by the high gas prices. And it's not just gas prices. When you have a long commute every day, you have more wear and tear on your vehicle, which means more vehicle maintenance, and that has gone up substantially as well. You also have tolls which have gone up basically everywhere. Your insurance is usually higher because you drive more. So, it's not just gas that costs more when you are a commuter. Here's a great example of this. Here's a story of somebody who lives in Virginia and they commute to Washington DC for work and the reason was the same, cheaper housing. But now this person spends about $200 more per month on fuel than she did just a couple months ago before the oil shock happened. Somebody else in California that drives a $120 m each way to Fremont says that he is spending roughly $1,600 a month on gas and tolls. And that's basically a second rent payment to get to work, guys. I mean, that is absolutely crazy, especially 120 mi a day commute. I can't imagine anybody doing that. But people really do have some of these insane commutes because that's what it has to come down to if you want an affordable place to live. In fact, commuting has actually exploded since the pandemic. Okay, according to the data, the number of Americans who are commuting 75 mi or more each way increased by 1/3 after the pandemic happened because we saw a lot of people move away from big city centers to get away from people. Lots of companies implemented work from home policies and everybody thought that was just going to be how it is forever. But a lot of companies have reversed those policies.

[00:03:02]And so anybody who moved far away from their job is paying for it substantially right now. And it's getting to the point like what do you choose? Do you choose to commute and pay the extra money or do you live closer to work and pay a lot more for rent or a house payment? It's like either way you can't win anymore.

[00:03:22]There is no workaround. And you might say, "Well, this gas price shock is going to be temporary. Well, that's what everybody keeps saying, but so far it's getting worse, not better. And even if everything ends tomorrow, all the fighting in Iran, and the whole oil supply production goes back into full swing, there's all this time delayed of the oil being refined and it actually making it into your gas tank. And as well as the big economic scare that something like this could happen again.

[00:03:56]It's not like prices are just going to drop overnight, even if all of this fighting stops today. Unfortunately, that's the reality. I mean, just a week ago, guys, I made a video and it said in that article that the national price of gasoline was $4.25.

[00:04:14]One week later, the national average is up to $4.54 a gallon. I mean, that's 25 cents 30 cents increase in just one week. and it's up 52% from where it was at the end of February. Most places in California are now averaging over $6 a gallon. Some places it even goes up to eight or $9 a gallon. And this is a huge problem because this is like a tax on the entire economy right now. Every extra dollar that people spend at the gas pump is a dollar that they're not spending somewhere else. at a restaurant, going to a movie, taking a vacation, shopping at a retail store, spending on home improvement, saving for their future or retirement, paying off debt. None of that. You can't do any of this right now because of how high the gas prices are.

[00:05:10]I mean, people were already squeezed before this. We've already talked a lot about how little disposable income people had before this oil price shock.

[00:05:18]Now, forget it. According to Bank of America, a lot more people now are shifting towards buying the cheapest possible groceries they can find.

[00:05:26]They're also cutting down on spending on things like electronics and furniture.

[00:05:31]And obviously, this is a huge problem because consumer spending is 70% of GDP.

[00:05:38]Maybe this is going to be the thing that finally throws us into the official recession. Even though the real recession started like four years ago, but nobody wants to admit that.

[00:05:49]According to AAA, we just saw the average cost of owning and operating a vehicle going up to over $12,000 per year when you factor in fuel, maintenance, insurance, depreciation, registration, and financing. And if you're a heavy commuter, that number can be up to 50% higher. So, think about it.

[00:06:11]$12,000 a year is $1,000 a month. Okay?

[00:06:16]If you're paying $1,000 a month just to have a car or maybe up to $1,500 a month if you have to drive a lot, that is an insane amount of money, guys. That's almost what the typical rent payment is in the United States. I mean, we've talked a lot about how housing prices are a problem and inflation is a problem, but this is a relatively new problem that we're all facing. Now, on top of this, one thing we didn't even touch on yet with all of this commute time is how much actual time people are spending with these commutes. Now, you know, sometimes people are spending three or four hours a day now in their cars, in traffic, sometimes even longer.

[00:06:57]And this has enormous consequences beyond the financial aspect of it. Long commutes are linked to high levels of stress, anxiety, depression, bad sleep, strain on relationships, burnout, and bad physical health. I mean, I wonder why you're spending, you know, all of your time getting to and from work at work, and then you come home just with enough time to maybe relax for a little bit, have a meal, go to sleep, and wake up and do it all over again. It's not a life that humans were meant to live. It just isn't because this leaves people way less time for family, exercise, social life, any sort of side income, or just rest. A lot of people are amazed that I'm able to put out six videos a week on this channel. And people are just like, "I don't know how you do it, Michael. You need to rest more. You work too hard." And all of this, but let me tell you guys, I have a very good system in place to ensure that I don't work too much. I'm not going to get into all the details of it in this video, but over the years, I have essentially perfected this and have made it actually pretty easy for myself to make this many videos per week. So, I definitely make sure I get enough time to rest and not be out shooting videos. But because I put out so much content, it kind of gives the perception that that's not the case for me. But I know how important it is to get rest and have downtime and avoid burnout. So actually the number one thing that leads to burnout for me isn't how much I work, but it's actually when the videos don't perform well because that feels like a reflection on me. When people don't watch the videos that I put a lot of time and effort into making, it makes me feel like, okay, this isn't relevant anymore. Maybe I'm not relevant anymore as a content creator. I'm not hitting the points that people want to hear. Sometimes I do obviously still have some hit videos, but like I told you guys a couple of months ago, I've been in YouTube jail. Things have gotten a little bit better recently. But let me tell you, it is harder than ever to figure out what you guys are interested in watching. And uh that's really my biggest struggle more than even how much I work. It's just trying to understand what you guys want to see from me and what you don't. But one way these high commuter costs can lead to strain on relationships is one couple said that now her and her husband are avoiding going out on dates because the driving costs are already so insanely high that this is a way to kind of scale back on the costs and they're skipping an entire summer vacation this year because the fuel costs are so high. Like I'm sure a lot of people are starting to second guessess their summer vacation plans this year with how high fuel costs are, plane tickets, hotel rooms, all of this stuff is substantially more than it was a year ago, guys. And the sad part is is, you know, people have already had to cut back on so many things in order to get by in this economy. And now this is just yet another thing, another thread that gets pulled and lowers people's quality of life just that much more. You know, I made that video about the hobbies the other day talking about how all of these hobbies that used to be affordable have gotten extremely expensive. This is another aspect of it because if gas prices are too high, imagine how many hobbies that require traveling somewhere, even just driving for 20 minutes or whatever, are not going to be happening now. Or how many fun recreational things people aren't going to do to relax and blow off some steam just because it costs too much to go anywhere now. And this is leading to a situation where consumer confidence just hit an all-time low, guys, in this economy. Going all the way back to 1978, since the University of Michigan started keeping track, we just hit the lowest reading ever and how people feel about the economy. And think about how many bad times we've been through in this country since then. During the 1970s and early 1980s, we had a massive oil shock back then. Okay? We also had a big stock market crash in 1987. We had a big stock market crash in the 90s and early 2000s.

[00:11:12]Obviously, we had the big great financial crisis in 2008. We had the pandemic in 2020. We had high inflation in 2022. Yet, none of those things were as bad as it is right now according to how people feel about things. We just reached a number at 48.2, 2, which is the lowest level ever recorded. And here's something else that I want to let people know about. You know, if you look at this chart here, this is the numbers going all the way back to 1978, right?

[00:11:45]And the lowest reading on the chart is 51 back in November of 2025. And that's just because this Fred chart isn't updated with this latest figure yet. But there's only two times in history that it was ever that low. And that was in about 2011 and 2010 after the fallout of the 2008 crash. And it was also back in 1980 probably because interest rates in the economy were at 18%. And one thing that I hear from people sometimes in the comments is, "Oh, you can't listen to the University of Michigan, Michael, because they're biased based on their political affiliations." Well, I'm going to push back on that just because when you look at who's president during all of these times when the readings are the lowest doesn't actually reflect that because a lot of people say, "Oh, University of Michigan is too Democratic so you can't listen to them." Well, Jimmy Carter, who is a Democrat, was president in 1980 when we previously hit this low when they first started keeping track. Then back in 2009, you had Barack Obama, who was also a Democrat, being president. And we had an ultra- low reading back then, as well as in 2011 when Barack Obama was still president.

[00:13:02]We also had a very low reading back in 2021 when Joe Biden was president. So all of those presidents were Democrats when we had extremely low readings on this chart, guys. So, you know, I understand how people want to argue about that stuff, but the reality is some of the lowest readings we've ever had were when Democrats were presidents, not just Republicans. So, it really goes both ways because some of the other low readings here were when Republicans were president, too. Personally, after looking at this data, I think this is much more a reflection of how bad things were at the time. You know, going back to the interest rate shock in 1980, that was horrible. It made things very unaffordable for a time. You know, you go back to after 2008, the fallout after that. The job scenario was horrible just like it is now. We also had a situation where people were losing their homes and everything felt like it was falling apart. People lost half of their money in the stock market. So, this is definitely a reflection of how bad things are. And the fact that we are getting a record low reading in 2026 tells you everything you need to know about the state of this economy. Then they talk about wage growth. Well, wage growth really hasn't kept up with inflation going all the way back to this time either. And there's also a heavy correlation here with how high gas prices are and where consumer sentiment goes. Because if you think about it, this is a driving nation, guys. People need to drive for basically everything almost everywhere you live. Some places are walkable. Sometimes people don't need cars. But that's not the reality of most Americans. And when gas prices spike like this to unaffordable levels, this is when you also typically see consumer sentiment hit all-time lows.

[00:14:50]And the other issue is that consumer confidence affects consumer behavior.

[00:14:54]Like for example, when people start feeling bad about the economy like this, they start cutting back on everything in anticipation of needing more money for other things in the future. People postpone home purchases. They delay vacations or other big purchases. They stop eating out. They hold on to old cars longer. Don't go out and buy a new or used car. And businesses respond by slowing down hiring just like we're seeing right now or stop hiring altogether or even worse cutting employees, cutting staff because business is so slow. And then at the same time, we have this big AI boom that is fueling this even more and making matters even worse. And yet we're always here constantly being told how good everything is week after week. How inflation's still not that bad. How we still have positive GDP figures. How this is a low hire low fire job environment. But everybody's reality is much different than that. You know, a homeowner who just got a 40% increase on their homeowners insurance and also has to pay higher HOA fees this year, higher grocery bills, and still has a $700 a month carve payment isn't going to be feeling too good just because Nvidia's stock just went up again. You know, and the biggest growing fear that people have is that these higher costs are going to be permanent. And I hate to break it to you, but you're right. If you think it's going to be permanent, it's because it is going to be. Guys, we don't see really any historical precedent for when we have high spikes of inflation like this and the price of everything goes up of everything going in reverse and prices on things starting to come down after that. You know, inflation tends to be permanent. And even though a rise in gas prices is not inflation, it still makes everything cost more because businesses have higher transportation costs on their goods and services and they pass that cost along to you. And because they're very worried and skeptical about it going back down, they keep those prices permanently higher or higher for a lot longer than maybe necessary out of anticipation of another spike coming shortly after. And you know who's making all of this much worse is our dysfunctional Congress. I saw a story today talking about how Americans are losing faith in the entire system right now. And only about 10% of Americans now approve of Congress while 86% disapprove. Well, I don't know about you guys, but I definitely fall into that 86%.

[00:17:30]Never have I remembered a time in history where it was so dysfunctional like now and essentially nothing was getting done. Especially not anything meaningful. Every time you hear about something being passed, it's always some Mickey Mouse agenda that's not going to help anybody afford anything right now.

[00:17:48]Just something ridiculous that no one cares about. And that's what they're very good about doing. They're good at passing new laws and reforms on things that people could care less about. I mean, it's to the point now where when there's a government shutdown and then they reopen the government, this is treated as a major achievement. Like, you guys are just not doing your job and then we're all supposed to applaud when you finally start doing your job again.

[00:18:12]No, we just had the longest government shutdown in history earlier this year.

[00:18:17]These guys are sitting there taking a break because no one can actually make a decision. Right now, they're essentially passing no new laws. Congress has enacted only around 90 new laws compared to 274 new laws in the prior Congress.

[00:18:32]This is historically unproductive. So we have legislation coming to a complete standstill as our country is facing enormous problems with housing affordability. Now, these gas prices and uncontrollable national debt, immigration, health care costs, infrastructure problems, higher energy bills, you name it. They're not doing anything to stop this. And listen, I'm the first one to tell you that the more government gets involved in things, the worse it usually gets. And I agree with that on most points. But the thing is there does have to be some checks and balances and regulations on things that are hurting everyday people like the expansion of these AI data centers. You know, they just pop up everywhere and then locals have to end up footing the bill for their higher energy prices. No one's doing anything about that. And that's also why we've seen President Trump signed so many executive orders.

[00:19:30]During his second term so far, he has signed over 250 executive orders, which is more than double the amount of laws that Congress has passed in the meantime. And I'm not sitting here saying that everything he has done has been great and that all of this stuff is lawful and constitutional. I'm not saying that. What I am saying is that all of that has to get done because it's the only way that anything might happen until Congress decides to maybe one day do something about any of this. So that's what I'm saying. I'm not saying it's right or this is how it should be done. I'm just saying that's most likely why it's happening. But it's definitely setting a very bad precedent because whoever ends up being president next is probably going to try doing the same thing. And you know now we're going to be run by executive orders now and whatever the president feels like doing until it gets shot down in Supreme Court. I don't think that's right either. This is the new reality of the world we're living in today. And I'm sure that's another major reason why consumer sentiment has hit record lows.

[00:20:31]You know, we pay all these taxes. We have to work extremely hard, do major commutes, and scrimp on the budget and lower our standard of living while our Congress gets paid, you know, six figure salaries, continuously participates in insider trading. Everybody who enters our governments in some sort of official position enters as a normal person and they always leave rich. Guys, you think that's a coincidence? Cuz I don't. And one push back I get all the time when I talk about consumer sentiment or the economy not doing well and that everybody's going broke is, well, everywhere I look around, restaurants are busy, the flights are busy, the hotels are busy, Disney World is busy.

[00:21:14]Okay. Well, let's dive into that for a minute because I found a story talking about how Disney World has been so busy and that this economic downturn doesn't seem to be affecting Disney's profits whatsoever. All right, let's dive into that for a minute. It says here that people are still booking Disney trips.

[00:21:33]They're paying for VIP experiences while at the parks. They're buying premium dining and filling up the hotels and cruise ships. Well, how is that possible, Michael, if the economy is so bad? Well, I'm glad you asked. If you just look up Disney spending on YouTube or any other social media platform for that matter, you will see the amount of people out there who are doing this and the massive amount of debt that they're taking on to make it happen. This has become the main way that people are paying for Disney trips and all of these VIP experiences. Guys, I've talked about this a few times in the past, but it's very common for families to go into major major debt to take their family to Disney because they talk about how, oh, we had this great experience when we were a kid and we don't want our kids to miss out on it and we don't care about the debt. We think it's worth it only to have reality hit them several months later once they actually get the bill in the mail. You know, almost all of this money that can is continuously being spent is all borrowed. That's what you have to understand. Almost all of them, I'm not saying everyone, but you're probably talking about 80% plus the amount of people who are still visiting these parks and spending all this money are doing it on a borrowed dime right now. It's not uncommon these days that a simple Disney trip for a family of four can costs over $10,000.

[00:22:59]And that's before you ever even step your foot inside the park. We're just talking about all the travel and lodging and food expenses. Once you actually pay for park tickets and every other premium experience inside the park, it gets worse from there. But yet Disney comes out and says that the consumer is still doing well just because their parks are doing well. As if that's some kind of bell weather for how things are going, guys. Like in case you haven't noticed, the way our economy is now and the way things work is completely broken from how it used to be. You know, nothing is tied to fundamentals anymore. You don't see the real estate market tied to fundamentals, although you're starting to see the reality of that happen now as home sales have absolutely crashed to 2009 levels. But that's a story for another day. But you have stock market valuations that are completely detached from reality. You have people spending money that they will never be able to pay back essentially going bankrupt for all of these experiences. So, you cannot look at these headlines anymore when it comes to unemployment, when it comes to consumer spending, when it comes to how well Disney is doing as a gauge for how the economy in general is doing. It just doesn't hold up because people have more options than ever before to be able to borrow money. And as long as that's the case, this is going to be the case as well. You're going to see people continue to borrow that money and expand their debt as long as they possibly can because it's the only way that they can live what used to be just kind of a normal middle class life. According to Disney's CFO, they said there's no evidence so far that gas price worries are eating into demand to come to Disney. Well, of course they're not because people are just spending all the money they don't have. They're just going to worry about it tomorrow. But we're all going to see this continue to come home to roost in the future economic data just like we're seeing right now. Why do you think consumer sentiment has hit all-time lows, guys?

[00:25:00]It's because people know this economy is completely jacked up. And I get it, too.

[00:25:05]I understand that some people are like, you know what, if it's not for doing this now and not for putting this on debt, my kids are small now. They're going to enjoy this the most now.

[00:25:14]Whether I can afford it or not at all, I need to do this now because it's going to be the only chance that I'm going to be able to do it where it makes sense because it's not like I'm going to be able to magically afford this stuff in a year or two from now. Even though Disney talks about how things are so magical.

[00:25:29]Well, the only thing magic is watching the credit card balance go up as you keep swiping it. That's magic for sure.

[00:25:36]Disney's also reporting that people are spending more per person once they're inside the park. And they've actually seen foot traffic down a little little bit, but spending per person go up.

[00:25:46]People are spending it on VIP tours mainly and skipping the line passes. And look, I get it guys. Tomorrow feels very uncertain with how much volatility we're seeing right now. And if this makes you feel better about your life, who am I to tell you not to do it? All I'm doing is reporting on this and letting you guys know what's going on and help to try to explain this oxymoron of an economy we have going on right now. You know, it doesn't make sense that so many people are broke and so many people aren't able to pay their bills, yet all of these restaurants and parks and hotels and planes are full to the max all the time.

[00:26:26]It doesn't make sense until you look at the fact that all of that can be financed. If that wasn't possible, if nobody could finance any of these experiences, I guarantee you all that stuff would be dead right now. Totally dead. Because there's just no way that the top 10 or 20% of Americans are going to support all of that spending. Yeah.

[00:26:44]Would they still be doing it? Sure. But then you would see everything 80% emptier because the rest of the 80% can't afford it. And the crazy thing is is Wall Street looks at this behavior and it gives them, you know, more bullish predictions on where the stock market's going to go in the next few months to a year because they see spending continuing in areas where they expect it to actually fall. And that makes stock prices go up. It makes futures go up because it gives them confidence that well, even with all this going on, people haven't stopped spending. And you're right, they haven't stopped spending. Thing is, they're just not spending their own money. They're spending money that they just don't have and they're going to have to borrow.

[00:27:24]Honestly, I think this is a big warning sign. The fact that Disney spending is so high right now, even with how bad the economy is and how bad the job market is and how high gas prices and inflation have gone recently. To me, this is 100% doom spending. And this isn't good for anybody. It's not good for people's outlook on anything. And I think it's a reflection on where people think things are going to go from here, which is nowhere but down. And they're like, "Might as well enjoy it now while I can." So, let me know what you guys are doing out there. Are you enjoying it now while you can and just going into debt like no one's business? Or are you being responsible and saving up for all the deals that are going to come once everything goes on sale from this? So, if you enjoyed this video, make sure you subscribe to the channel. And if you don't want to wait for my next video to come out, check out this one on the screen right over here.