“There’s an energy tsunami coming, and when you see it coming you better get on top of the wave, or you’re going to get crushed by it.”

These are the words of retired Marine General James Jones, the president of  21st Century Energy, the group behind the recent open letter by 27 U.S. political elders to both presidential candidates and every member of Congress saying the U.S. faces “a long-term energy crisis.”

There’s two ways of looking at it. Oil-rich nations are getting rich at the expense of the U.S. thanks to sky-high crude oil prices, says energy investing expert Byron King.

In June, as you know, the price of oil just rocketed up (as the dollar fell). I follow oil like a hawk, and even I was astonished at the pricing trajectory. I really thought that profit taking and the general negative impact on the world economy would have to slow down oil’s rise. But no, oil kept moving up.

I kept wondering… Who the heck is buying this oil? Are you broke yet?

But somebody is buying the expensive oil, and we are in the midst of the greatest transfer of wealth in history. Entire nations are being impoverished. Other nations are being enriched beyond their wildest dreams.

Rising energy prices, and the related transfers of wealth, are among the great strategic movements of our time. Since the dawn of the oil age, we in the U.S. have had some semblance of control over energy prices. Heck, at one point, prices were so low that the state of Texas empowered the Railroad Commission of Texas to stabilize prices.

It’s a long story, but the West has, more or less, always had a handle on energy prices, even in the face of OPEC, over the last 40 years or so. At the end of the day, the West could have faced down the major oil exporters and kept some sort of lid on the upside of energy pricing. Not any more.

The people who sell oil are, of course, more than happy to take our money. They are ecstatic, truth be told. In a matter of a few years, Western energy demand is moving the wealth of many generations into new hands. Some nations are getting rich, while others are getting poor — fast.

A few years ago, Russia was a post-Soviet basket case. Now the Russians are buying up much of Western Europe.

A few years ago, the United Arab Emirates was a dusty backwater. Now the UAE is becoming a world destination, and its sovereign wealth fund is buying the Chrysler Building in New York.

Meanwhile, expensive oil is breaking the backs of the middle classes in the U.S. and many other countries. Wait until next winter, when millions of households in the U.S. and Europe cannot afford to heat their homes. Ugh!

And world economic growth is stalling as oil prices rise. So it really seems as if the rising prices have to moderate. This is what happened in the first couple of days of this week, with oil trading down, from $145 to $136 per barrel. Finally, a breather. Whew!

Source: Rising Energy Costs and the U.S. Economy