Massive world recession to occur if Iraq attacked: Economist

XINHUA NEWS AGENCY / Drudge ^

[RCW2001]

Massive world recession to occur if Iraq attacked: Economist

HONG KONG, Sept 12, 2002 (Xinhua via COMTEX) -- The Economist Intelligence Unit (EIU), which operates under the Economist magazine, predicted that the world would suffer a massive recession if Iraq were attacked and Middle East oil producers protested by pushing up the oil price.

Robin Bew, the chief economist of the EIU, told Xinhua in a written commentary Thursday, "Our forecasts assume that the United States does attack Iraq, and that the Middle East oil producers oppose the US action and team up to cut oil production, and thereby, pushing the oil price to, say, 70 US dollars a barrel or more, that would deliver a massive supply-side shock to the global economy and probably trigger a massive recession, similar to the oil shocks in the 1970s," Bew said.

Turning to the US economy, Christopher Nailer, the Singapore- based regional economist of the EIU, also told Xinhua in the commentary that the current imbalance in the US economy is severe, saying that sluggish growth is forecast for both 2002 and 2003.

"We expect the US economy to grow only 2.4 percent in 2002 and accelerate to only 2.8 percent in 2003. This is better than 2001 when the US economy grew only 0.3 percent, but still very weak.

"However, the imbalance in the US economy is severe, and we rate the possibility of a major recession - worse than the 2001 one - within the next two years as a 30 percent probability," Nailer said.

Copyright 2002 XINHUA NEWS AGENCY.

[JennysCool]

As I just said on another thread, look out for the pundits warning about "The Brutal Iraqi Winter" as well..

[Diogenesis]

[cmsgop]

In the words of Al Bundy..........

Blah,Blah, !!!!!!!

[pbear8]

the world would suffer a massive recession if Iraq were attacked and Middle East oil producers protested by pushing up the oil price.

The ME countires like and need their petro-dollars more than they like and need Saddam.

[Texbob]

This writer must have recieved the same pay off as Scott Ritter for spreading Iraqui propaganda.

[RightWhale]

Middle East oil producers protested by pushing up the oil price.

Chances of this approximate zero to 4 decimal places.

[evolved_rage]

Like that growth spurt that started last time we attacked Iraq???

[exnavy]

Chinese source.

[Scott from the Left Coast]

A Hong Kong-based think tank, eh? And Hong Kong is now controlled by the communist Chinese...and so we're to take their advice about economic issues?

Sorry about that Xinhua, Clinton's no longer in office, you've lost your access.

[dogbyte12]

Well, I think they are right. If oil shipments are reduced out of the gulf and the prices sky rocket, the world will teeter into a big old inflation induced recession. Just about everything we buy has a energy component built in. You buy flowers for your wife, you are paying partially for the electric bill of the owner, the cost of gas when it is trucked to the airport, the cost of the jet fuel to fly it to the local airport, the truck that takes it to a distribution center, the truck that takes it to the florist, the car that takes it to your wife. Of course, the cost is miniscule, but in just this example, it it costs $1.00 worth of gas to deliver those flowers, and it becomes $2.00... the florist will make you eat the cost there pretty much, considering the other energy uses along the way, I could see flowers going up $1.25 a delivery just there. Same goes with produce, furniture, ya name it.

[teresat]

Wow this guy probably forcasts as good as Nostradamous. Did he give his picks also for the 8th race at Belmont park tomorrow?

[leadhead]

Bad assumptions. US attacks,in 96 hrs. US controls 2nd largest known oil reserves. Opec shits pants at prospect of competition. Thousands of fat, greasey diaper heads in Saudi commit suicide because their payment for little boys cut off.

[CT]

Fact: Russia and the CIS produce more oil than the G-D Arabs. Just happened this year. And, as others have already said, the Arab elite have very healthy appetites for luxury, and therefore need the money.

[another cricket]

Very Good! Now take the next logical step. Saddam is going to lose. There is no question there. All that lovely Iraqi oil will be under either direct US control or under the control of a government friendly to us. All that oil goes on the market and the Russians will up their productions too. Hey, they want us to buy from them not the ME. And there are a few small countries that are on our side in the area that probably break ranks. Especially if we make it know that they would become our preferred suppliers. So six months to a year down the road at the maximum we quit buying oil from all those countries that tried to stab us. They go back to having no industry and nothing to export.

I kind of hope they do try to do it. BTW to keep us going in the short term we have the strategic reserves. Or did you think that we were filling it up for the fun of it? We might even get to drill ANWR.

a.cricket

[ex-snook]

Bush was given the great opportunity to bring peace to the Near East, a businessman's properity to the country and a downsizing of government (deficit was rising long before 9/11). He has screwed up on all counts, as they say, BIG TIME.

[brat]

It will probably occur without the Iraq attack! In fact, the purchase of our weaponry from other lands ought to help them out considerably. Too bad it won't do much for us.

[eno_]

Sure, but ya think maybe Iraq will end up paying us to reconstruct Iraq with oil money? Too bad Bechtel is privately held. I'd buy some about now.

[marron]

, predicted that the world would suffer a massive recession if Iraq were attacked and Middle East oil producers protested by pushing up the oil price.

You would think a publication called "Economist" would understand economics. The Middle East oil producers can not push up prices. They simply do not have that kind of control.

Every attempt to force up prices simply causes a subsequent drop, combined with a loss of market share.

These guys are over. I wonder whats going on over at the Economist, must be letting their Journalism majors try their hand at economic analysis...

[Hoosier-Daddy]

And just how would the world economy be affected if he were to nuke one of our cities?