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The biggest change on the margin

These two charts represent what is arguably the biggest thing that is changing in the U.S. economy these days. Not only is the price of natural gas declining significantly, but it is getting cheaper relative to crude oil by leaps and bounds. And it's all thanks to new drilling technology (fracking) that has resulted in huge new natural gas discoveries and production in the U.S. It's probably impossible to imagine all the ramifications of this for the U.S. economy, but they are surely going to be very significant. When a relatively clean source of energy becomes suddenly abundant and extremely cheap, it is bound to be disruptive in more ways than one can imagine, and it is bound to result in a stronger economy in ways that we have yet to imagine. If there is any reason to be optimistic about the future of the U.S. economy, this is arguably the best.

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