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” Why High Oil Prices Even At $200 Won’t Cause A Recession “
Won’t cause a recession because we’re already in one - it could, however, transform the current recession into a full-blown depression....
When you have to pay more for gas to get to the grocery store to pay more for groceries and every thing else you start scrimping. That shows up in the overall economy.
Is this guy just looking at what people pay out at the pumps?
Is he not looking at all the other products (including heating oil) that the high cost of oil is pushing up? Everything you buy is going up due to transportation costs.
This article is breath-takingly stupid....museum quality stupid. $7 gas will ensure a recession and civil unrest. The fact that Europeans pay more is irrelevant. Europeans don’t have the transportation needs or housing patterns we do. $7 gas (which means very expensive diesel, too) will also send the cost of food through the roof.
I disagree with his implicit assumption that we are not already in a recession. Yah yah I know it ended in 2009, except here we are three years later and the job situation is only getting worse each month.
That said, oil at $200 a barrel leading to $6+/gallon gasoline will take the last few dollars of any number of people and small companies still trying to get by — commuters, contractors driving from job to job, any delivery service, etc.
It’ll cause a Flukeing recession at my house...that’s enough.
In my economy, higher gas prices have done great harm. None of the people care about what some dude calling himself an oracle thinks.
We just know that our money is disappearing with high food and gas prices.
No vacations or fun anymore. Obama is responsible for that.
May he rot in a dark place.
If Americans would drill more then expensive oil would be good for the economy. Here in Canada, the value of the dollar rises and falls with the price of oil; several years ago, when our dollar was worth $0.70, a Royal Bank economist predicted that our dollar would reach par when oil hit $100. Our dollar passed parity when oil was ~$98.
and when the poor go on welfare because they lost their jobs because they can no longer afford to drive to work and back and still pay for food and rent???Stupid article written by a complete dumb-ass.
“With Federal Reserve Chairman Ben Bernanke’s zero-interest-rate policies in place until 2014, and the chance of yet more “stimulus,” it is indeed possible we will see oil at $200 per barrel.”
Just as long as Federal government salaries and free transportation stays above the effects....As for the rest.....
.....ride bicycles, like China.
This comparison is quite incompetent. The attentive observer would immediately want to know how many gallons per year are bought by the average euro vs the average American motorist. What percentage of disposable income would 8 to 10 dollar gas absorb from the average American vs the gas bill for the average euro.
The average mileage for Americans is from 12 to 15,000 miles per year. For the UK, by comparison, it is around 9200-9500 miles. With better mileage per gallon, most likely, as well. Probably even less on the mainland.
I’m sure that for old Marty...the price of hi-test for the 5 series Bimmer is a pretty irrelevant day to day expense.
However...for the rest of us peons and peasants.....it’s becoming ever more the bulk of our discretionary income.
Tell that to the guy at the corner deli where I used to buy my coffee and bagel in the morning, my lunch in the afternoon. The cost of gasoline prevents me from stopping in his store, I now bring a thermos and pack my lunch and my friend at the deli no longer gets $60 - 80 a week from me. I know I’m not the only customer of his who is forced to do this.
What could prevent a normal pullback from morphing into a larger S&P-500 index correction? Traders haven’t given up hope that Fed chief Bernanke would ride to the rescue with another big juicy blast of QE, in order to keep the stock market addicts sedated at artificial highs. Yet Bernanke’s dilemma is, another big round of QE could also catapult Brent crude oil to $150 /barrel, and topple the world economy into a synchronized recession. “Oh what a tangled web we weave when first we practice to deceive,” -- Sir Walter Scott.
http://www.financialsense.com/contributors/gary-dorsch/minefields-that-can-blow-up-global-stock-markets-in-2012
The Bull Market needs another fix.
I think the muppets are catching on and this guys article isn’t going to fly ... Mrs. Muppet said so and I trust her intuition.
Ya gotta love economists.
Martin O. Hutchinson is a Contributing Editor to both the Money Map Report and Money Morning (http://www.moneymorning.com/). An investment banker with more than 25 years’ experience, Hutchinson has worked on both Wall Street and Fleet Street and is a leading expert on the international financial markets. At Creditanstalt-Bankverein, Hutchinson was a Senior Vice President in charge of the institution’s derivative operations, one of the most challenging units to run. He also served as a director of Gestion Integral de Negocios, a Spanish private-equity firm, and as an advisor to the Korean conglomerate, Sunkyong Corp. But it was Hutchinson’s work in Bulgaria, Croatia and Macedonia that solidified his reputation as a true ...More “hands-on” expert on the developing economies. As the U.S. Treasury Advisor to Croatia in 1996, he helped the country establish its own T-bill program, launch its first government bond issue, and start a forward currency market. Hutchinson returned to the United States, was named Business and Economics Editor at United Press International, and was able to jump-start the financial-news operation of that historic wire service. In October 2000, Hutchinson began writing “The Bear’s Lair,” a weekly investment column that appears on the Prudent Bear Web site. Hutchinson earned his undergraduate degree in mathematics from Cambridge University, and an MBA from Harvard University. He lives near Washington, D.C.
Funny - I don't see anything in that resume that leads me to believe that Martin will ever have to worry about getting the scratch to put petrol in the ol' gas tank.
AND ANOTHER THING. Looks like Martin has got a guaranteed paycheck in the event of a severe recession or depression, so he gets to put on the Alfred E. Neuman face all day long.
What do the peasants do?
Everybody lies about sex. This kind of crap reminds me of how the MSM covered for Clinton. $200 bbl for oil would be a disaster. This idiot can talk about the macro effects of higher prices for oil, but it would amount to a huge regressive tax on most Americans who are living from pay check to pay check and it would suck huge amounts of discretionary income from the economy. And the prices of goods shipped by truck and agricultural products will go up.