Back in January, I began getting you prepped for higher oil and gasoline prices later on this year. Then on April 8, I gave another update saying that a breakout higher in oil and gasoline prices would happen within mere months, according to what I was seeing on the charts.

Well, now the breakout has begun, just as the calendar was turning over to July.

What now? The acceleration of the rise in the price of oil will continue, which will now make a much bigger difference at the gas pump.

So, for one, I hope you took heed back in January and April and began to trim some monthly expenses and save up some extra money for the larger gasoline bills.

But also, I hope by reading my blogs, you know how to combat rising oil and gasoline prices too.

By buying huge oil companies' stocks when you believe that oil's price is going to rise is a great strategy because as oil's price rises ... so do the profits for the oil companies, which leads to better earnings and thus a higher stock price. The extra money you make on the oil stock's appreciation helps to mitigate your rising gasoline bill.

If you don't know which oil stocks are worth a look, consider signing up as a subscriber to my newsletter service, the Ultimate Wealth Report, at www.ultimatewealthreport.com. Once you're a member, you'll be able to log into the website and see which stocks I've recommended for our portfolio.

But back to the story on oil.

Initially, the rise in oil's price is a good thing. How so? I'll get to that in just a second. But let me remind you of the myth that's been going on for the last year or more in America.

The story goes like this. We've found so much oil and we've ramped up production so much that oil's price is never really going to get high again and gasoline prices will remain subdued at the pump as a result.

I've been shooting that story full of holes for a long time now. But now, with oil's breakout and steady rise, you have your proof that what they were saying was bunk!

Ok, why is oil's rise initially a good thing? It's proof that the global economy is still growing and expanding (even though I'd like it to be at a more robust pace).

You see, when economic growth is waning, there is less demand placed upon the supplies of oil. And when the global economy is expanding, yes even more so than the increased supplies, the demand increases upon the supplies of oil and oil's price rises.

I watch oil a lot because it's a great barometer of how the global economy is faring. And what I like best about it is that it's more of a real-time indicator than watching delayed gross domestic product reports, etc.

So oil's rise proves to us that the global economy still has its footing and is strengthening overall. And that's a good thing. When economies are expanding, jobs will be created.

And now for the bad news.

There comes a point at which oil's rise becomes like an ankle weight to a runner. What is that price level? It's hard to say an exact price, but we know from previous times when oil got too high and weighed heavily upon the economy that anywhere from oil at a price of $115 to $130 per barrel, if sustained for many months, can become too big of a weight for the global economy.

Well, guess what? That's the range that we're firmly heading into in the months ahead. Oil is bobbing around in the $106s to $107s as of this writing, but the projections that I have from chart patterns that have formed tell me that we'll likely see $117 to $130 per barrel oil in the months ahead.

What does that mean at the pump? It means $4 per gallon on average for the nation. Some places, like in California, could be closer to $5 per gallon by the time that happens.

Right now, where I live in Texas, we're experiencing $3.20 to $3.40 per gallon, but in California, there are places that are already around $4 per gallon. I believe we could see close to a $1 per gallon rise before it's all said and done.

That could amount to an extra $20 to $25 per week, or an extra $80 to $100 per month, for many people.

Well, when they've got to spend around an extra $100 per month just to get to work, church, home, etc., they're going to have to cut back elsewhere ... like in retail spending.

Much of our economy is driven by consumer spending. Yet if people aren't spending because they're forced to pay higher prices just to cover their gas needs, then it will end up weighing upon the economy.

Additionally, if you think you'll be crying the blues when this all happens, what do you think it will be like for huge shippers such as Wal-Mart and their 18-wheeler trucks, or UPS and FedEx? What about airlines and their jet fuel? It could very well "get ugly" once again like it did in 2008, except this time we could see new all-time highs set at the pump.

So if you haven't begun to prepare for these increased prices ahead, trim the fat in your budget and consider making investments that will profit from oil and gasoline's rise too. That way you're not crying the blues like everyone else is that hasn't done either one of these things.