Will oil prices skyrocket soon? When the price of oil rises dramatically, that tends to be really bad for our economy. Because we are so spread out and goods are transported over such vast distances, our economy is particularly vulnerable to oil price shocks, and that is one reason why the events that we just witnessed in the Middle East are so alarming.
According to an article that was published by the Federal Reserve Bank of San Francisco in 2007, five of the last seven U.S. financial crisis that had occurred up to that time “were preceded by considerable increases in oil prices”. Since that article was published in 2007, the financial crisis that began in 2008 hadn’t happened yet, and of course that crisis was immediately preceded by the largest oil price spike in history. So that means that six of the last eight U.S. financial crisis were preceded by oil price spikes, and now we may be facing another one. It is being reported that it may take “months” for Saudi Arabia to fully repair the damage that was done to their oil industry, and that could fundamentally alter the balance of supply and demand in the global marketplace.
Earlier, I discussed why high oil prices are so bad for our economy. When the price of oil is too high, it can cause inflation and hurt economic growth simultaneously. One analyst quoted by Oilprice.com believes that we could soon see it hit $80 a barrel, and others believe that it could move up toward $100 a barrel not too long from now. In the days ahead, global markets will be watching Saudi Arabia very carefully. The longer it takes them to resume normal production levels, the higher the price of oil will go.
Music:
CO.AG Music
For more economic collapse news visit our websites: www.theeconomiccollapseblog.com and www.epiceconomist.com
Fair Use Notice: This video contains some copyrighted material whose use has not been authorized by the copyright owners. We believe that this not-for-profit, educational, and/or criticism or commentary use on the Web constitutes a fair use of the copyrighted material (as provided for in section 107 of the US Copyright Law. If you wish to use this copyrighted material for purposes that go beyond fair use, you must obtain permission from the copyright owner. Fair Use notwithstanding we will immediately comply with any copyright owner who wants their material removed or modified, wants us to link to their web site, or wants us to add their photo.
Most of artwork that are included with these videos have been created by Epic Economist and they are used as a representation of the subject matter. The representative artwork included with these videos shall not be construed as the actual events that are taking place.
0 Comments