Katrina’s wounds are still fresh, and word tonight is that the Gulf Coast must prepare for another large hurricane, this time named Rita. It appears that it will strike Key West tomorrow as a category 2 or 3 storm, and will aim for the gulf, destined to make landfall as a category 4 or 5 hurricane around the end of the week. Where will it make landfall? Well, Houston seems likely, but there’s also a chance it could turn north to New Orleans.

My understanding from the news is that New Orleans really couldn’t withstand another strike like Rita is appearing it could deliver. I saw on the news that the Army Corps of Engineers believes that they could stand 3″ of rain across six hours, and a storm surge of five feet or so. If Rita even makes a glancing blow, I suspect New Orleans will see conditions far beyond what they can withstand. The good news is that New Orleans is mostly vacant, and it looks like mandatory evacuations there are coming soon. However, the additional damage that Rita could do to the city and the oil business could be staggering, and surely would impact the economy of the US.

If it hits Houston though, the oil business there could be impacted, and that would also impact the country’s economy. Just the thought of what Rita could do has already had an impact. Oil went up 7% today, gold has surged from about $435 to close at almost $470 today, and silver has gone up nearly 5% in the last week or so. It’s crazy. There’s so much speculation on everything anymore that someone sneezing the wrong way causes the financial world to be rattled. I can’t imagine what gas at the pump will do this week. It got as high as $3.29 just after Katrina hit, and I have to think that it will push at least that high.

This is crazy folks, absolutely crazy. Hold on to your hats, the ride’s gonna get bumpy.