It is clearly obvious that this entire banking crisis was caused by the sudden quadrupling of energy prices, which caused every business and family in the US and the world to slam the brakes on spending and commerce.
That freeze on growth caused home and real estate values to stop instantly, which left countless banks and families with mortgages that cost equal to or more than the property or business was worth.
Yes — these banks and families were negligent and careless, but if not for the REFUSAL of Democrats and enviro nut jobs to allow drilling, the American economy would still be growing and prospering.
Does anyone believe that if oil had not jumped from $40 a barrel to $150 a barrel in a years time that the economy would not have tanked.
The cost of energy was only a small part of the reason for the collapse of the economy. You can only go so far only a credit card, then the bills start coming in.
No, high energy costs did not collapse the economy. Far from it. This caused enormous pain to people struggling to get by, but no effect on wall street or the FIRE economy (Financial, and Real Estate), which is where the collapse is taking place. Finance = collapse of Bear Stearns and other banks. Insurance = collapse of AIG. Real Estate = collapse of housing bubble. That is your culprit, NOT oil prices.
High oil prices were an effect, not a cause, in the economy. When the housing bubble collapsed, the hedge funds and the other speculators needed a new place to play. Don’t expect the economy to be all better now that oil is at $70/barrel.
You need to study about the liquidity crisis and how the US government tried to inflate one asset bubble after another in a futile attempt to pretend the economy was strong. Our debt-driven economy was never strong as it appeared to be and an enormous amount of wealth in the economy was just pretend wealth, it was funny money.
Say you and John Doe buy eachother’s home. It’s just a title transfer, isn’t it. If you sold your home to John Doe for $1 BILLION, and John sells his house to you for $1 BILLION, does that make both your homes really worth $1 BILLION? I mean, you both have receipts that said you sold your home for a billion dollars.
Saying something is worth more than it’s true value on the open market doesn’t make it so. That was the housing bubble. But instead of a billion dollars, houses were only going for double or so what their true value was worth against current incomes and rents.
The collapse of the credit bubble in the form of the housing crash and related assets and securities are what caused this economic collapse. Expensive oil had nothing to do with it and was nothing but a side effect of collapsing house prices.
Recall that the price of oil started shooting skyward only after the price of houses started collapsing. Oil followed housing, not the other way around. The economic crash followed housing, not oil.