Boom Goes The Dynamite: Oil's Price Crash Is Going To Rip The Global Economy To Shreds

Seeking Alpha ^ | 13 Jan 15 | Michael T. Snyder

[SkyPilot]

If you were waiting for a “black swan event” to come along and devastate the global economy, you don’t have to wait any longer. As I write this, the price of U.S. oil is sitting at $45.76 a barrel. It has fallen by more than 60 dollars a barrel since June. There is only one other time in history when we have seen anything like this happen before. That was in 2008, just prior to the worst financial crisis since the Great Depression. But following the financial crisis of 2008, the price of oil rebounded fairly rapidly. As you will see below, there are very strong reasons to believe that it will not happen this time. And the longer the price of oil stays this low, the worse our problems are going to get. At a price of less than $50 a barrel, it is just a matter of time before we see a huge wave of energy company bankruptcies, massive job losses, a junk bond crash followed by a stock market crash, and a crisis in commodity derivatives unlike anything that we have ever seen before. So let’s hope that a very unlikely miracle happens and the price of oil rebounds substantially in the months ahead. Because if not, the price of oil is going to absolutely rip the global economy to shreds.

[SkyPilot]

2015 is shaping up to be a year of reckoning.

[SkyPilot]

What many market and economic analysts are now saying (and have been saying) is that the oil price crash will affect junk bonds first, and when they go bust, the QE over-inflated stock market will quickly follow.

Falling Oil Prices Could Lead to Massive Junk Bond Defaults

[The_Media_never_lie]

One thing for sure; blacks and women will be hurt the most.

[SkyPilot]

As Oil Prices Fall, Banks Serving the Energy Industry Brace for a Jolt

[Jim Noble]

the global economy

Since there is no nation called "the globe", and there is no political community called "the globe", and there is no government that rules "the globe", and there is no money system that operates everywhere, how can there be a "global economy"?

[SkyPilot]

One thing for sure; blacks and women will be hurt the most.

[Star Traveler]

There are sure a lot of people in the press rooting for higher oil prices. I’m rooting for low prices. It’s helped me out a lot, thus far!

[Jim Noble]

The men in this picture are going to be swinging from ropes before this is all over.

[SkyPilot]

and there is no money system that operates everywhere

That is coming very soon I believe.

If things crash hard, beyond anything the world has seen before, expect to hear the buzz word "reset" all over the news.

[be-baw]

Good grief. Not another one.

[txhurl]

Nadir Oil.

[Diana in Wisconsin]

“2015 is shaping up to be a year of reckoning.”

No more so than 2008 was!

And if it’s worse? Then it’s already too late for 99% of the dopes that didn’t prepare.

[Diana in Wisconsin]

‘Whatever’ Ping. ;)

[SkyPilot]

There are sure a lot of people in the press rooting for higher oil prices. I’m rooting for low prices. It’s helped me out a lot, thus far!

Yes - the banksters and the oil cartels have been screwing everyone over for years with high prices. I read that oil could even go as low as $25. A combination of the Saudis trying to crash Iran's economy, more oil on the market due to US fracking, and possibly US policy to try and crash Russia's economy is causing this massive price drop. The consumer (and I as well) are enjoying it.

I do see it, however, crashing the world's markets. The energy companies owes banks Billions, and will default if the price stays low enough for long enough. The Saudis just announced there is no way they will cut production. Venezuela's Marxist/Communist government is collapsing as I type this. The junk bonds and energy stocks will collapse very soon unless the price goes back up, and I don't see that happening right away.

[SkyPilot]

Lol - I agree.

[Mark17]

There are sure a lot of people in the press rooting for higher oil prices. I’m rooting for low prices. It’s helped me out a lot, thus far!

How did the "global economy" survive, when oil prices were low enough, that gasoline was 30 cents a gallon?

[PAR35]

There is only one other time in history when we have seen anything like this happen before. That was in 2008, just prior to the worst financial crisis since the Great Depression.

Let's give the youngster credit for being willing to expose his ignorance in public.

November '85 to March '86
Oct '90 to Mar '91.

So, those of us either a bit older or who at least are willing to research rather than pontificate, know that it has happened repeatedly. And it will happen again.

[Karl Spooner]

"There are sure a lot of people in the press rooting for higher oil prices. I’m rooting for low prices. It’s helped me out a lot, thus far!"

No kidding! This sounds like government employees crying about a tax cut.

[Karl Spooner]

"There are sure a lot of people in the press rooting for higher oil prices. I’m rooting for low prices. It’s helped me out a lot, thus far!"

No kidding! This sounds like government employees crying about a tax cut.

[Eric in the Ozarks]

I predict $1.36 gasoline within a month...