The writing is on the wall for the continuing collapse of the U.S. dollar and in turn the seemingly never ending surge of fuel prices. Oil and gold prices, both of which are firmly connected to the health of the dollar, are occupying milestone territory. Crude oil has surged past the $100 a barrel mark to over $102 and some analysts are saying that the sky is the limit. Gold prices are flirting with the $1000 mark reaching as high as $989 in recent days, up from $973 just last Friday. These price surges in gold and oil along with recent developments in the global and domestic political climate are now leading to talk of prices at the pump crossing the $4.00 mark sometime this summer in the U.S.

As the dollar is plummeting investors are frantically looking for a place to invest their assets once they move away from the dollar. Many of these investors are turning to oil which is the most attractive commodity on the market today and therefore is directly benefiting from an exodus from the dollar.

Another factor in rising fuel prices is Iran taking steps to unhinge the once firm control the U.S. dollar had on oil trading through the opening of an Iranian oil bourse which is expected to further weaken the dollar in the coming years.

This comes at a time when Venezuela’s Hugo Chavez, the leader of the world’s fourth largest crude exporter, has sent troops to his border. This deployment of troops sets the stage for the destabilization of the region, which would surely have an impact on the price of crude.

On the domestic political front Karl Rove addressed oil prices on Fox’s Sunday morning broadcast by predicting that if the U.S. were to redeploy the soldiers in Iraq, it could send oil up to $200 dollars a barrel. I do not believe that his prediction is accurate but his statement does give a glimpse into how the Republican Party plans to capitalize on the economic struggle most American’s feel as a result of high oil prices.

Oil was at $36 at the beginning of the Iraq War, so the presence of U.S. troops is doing little to control the price of oil, the weakening of the U.S. dollar shoulders most of the blame in a reality based analysis.

A wildcard in the current price of oil is the meeting tomorrow of OPEC. OPEC is expected to keep production levels steady, but a drop in production would accelerate the increase in the price of crude.

The reality is that the hurt of record high crude prices doesn’t end at the pump for American consumers, but rather drives up the prices of all products that are shipped to the location of the final purchase, which essentially includes almost all products Americans buy.

The other market that has been dramatically affected by the devalued dollar is the gold market. As the Federal Reserve continues to devalue the dollar by printing money to increase the money supply, we are seeing gold skyrocket. Gold has gained 18% already this year alone. This percentage is a jaw dropping figure when you consider many analysts are not seeing a slow down in the increasing value of gold as long as the dollar continues to fall. With many on Wall Street predicting yet another round of interest rate cuts by the Fed in the near future, gold is expected to see another spike.

All of this is occurring at a time when many Americans find themselves stuck in jobs where wages remain stagnant despite skyrocketing prices. Because of this reality many people are being prices out of some markets and luxuries they recently were able to afford. Soon many Americans may be priced out of the market of necessities such as food and clothes. If gas prices reach the predicted $4.00 in a few short months, this may become a reality.

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