When Oil Prices Double, Recession Often Follows

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    Apr 25, 2011 3:36 PM GMT
    Not good. Of course, this also helps to explain why the blame of high oil prices are being blamed on speculators by the Obama Administration now.

    http://www.thefiscaltimes.com/Columns/2011/04/25/When-Oil-Prices-Double-Recession-Often-Follows.aspx

    There are plenty of risks in the economic outlook right now, including global supply disruptions following the multiple disasters in Japan, sovereign debt problems in Europe, budget gridlock in the U.S., and China’s inflation and rate hikes. What economists are most worried about, though, is oil. West Texas Intermediate crude ended above $112 per barrel in New York trading Thursday before the Easter break. Brent crude, the European benchmark, was just over $124. The average price for U.S. gasoline, at $3.85 per gallon on Friday, continues its march toward the $4.11 peak hit in 2008.

    Already, rapid growth in emerging markets in Asia and South America is pressuring tight global oil supplies. That’s what pushed oil prices to $147 in 2008, adding to the problems in the U.S. economy. The Paris-based International Energy Agency in its April report estimated that effective spare production capacity within OPEC, which supplies about 40 percent of the world’s oil, stands at 3.91 million barrels per day. Based on OPEC’s March production of 29.2 million barrels a day, that means OPEC is producing at just over 88 percent of capacity – leaving a thin margin close to the level that helped drive oil prices up in the previous decade. The turmoil in Libya has already taken most of the country’s 1.7 million barrels per day off the market, and any further supply losses would be acutely felt.

    How would oil in the $140-$150 per barrel range play out? Economists say much would depend on the speed of the rise. In the U.S., a spike to that range over the narrow space of a quarter would cause a sharp pullback in consumer spending, mainly on high-priced discretionary items such as cars and home goods. The surge would generate ripple effects throughout the economy, including outsized impacts on transportation, distribution, and construction, while increasing the chance of a new recession. The recent price rise has already pushed up U.S. inflation to an annual rate of 6.1 percent from December to March, cutting spending growth sharply last quarter and hammering consumer confidence.
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    Apr 25, 2011 6:33 PM GMT
    Just in time for 2012... the second (and stronger) wave of Great Depression II ...

    the cyclical bear market epoch will likely kick off late this summer if not earlier.

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    Apr 25, 2011 6:46 PM GMT
    imo, iits all the continued political turmoil (+potential) in the MENA region that is really affecting the price spikes atm as opposed to a sustained increase in demand - not good
  • rnch

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    Apr 25, 2011 6:48 PM GMT
    you'd love for that to happen, wouldn't you, ridd?
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    Apr 25, 2011 7:41 PM GMT
    When Obama sends spending proposals to Congress, it dosn't count if they want to spend even more.
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    Apr 25, 2011 8:18 PM GMT
    rnch saidyou'd love for that to happen, wouldn't you, ridd?



    Absolutely right, man.
    Isn't it despicable the way the Repubs are HOPING for the economy to TANK - because they think it will help a Repub get elected?
    Talk about UNPATRIOTIC!
    Whatever happened to "Country First"?

    It really is a tragedy for our nation that so many in the Repub party love the Repub party more than they love AMERICA.
    It's shameful.
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    Apr 25, 2011 9:20 PM GMT
    rickrick91 said
    rnch saidyou'd love for that to happen, wouldn't you, ridd?



    Absolutely right, man.
    Isn't it despicable the way the Repubs are HOPING for the economy to TANK - because they think it will help a Repub get elected?
    Talk about UNPATRIOTIC!
    Whatever happened to "Country First"?

    It really is a tragedy for our nation that so many in the Repub party love the Repub party more than they love AMERICA.
    It's shameful.


    When have the Republicans ever been Patriotic? I'm not surprised by any of this.
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    Apr 26, 2011 12:29 AM GMT
    southbeach1500 saidOne of the main reasons the price of oil is going up is because the U.S. dollar is weakening.



    Well I am sure your right to large degree and I do admit I agree with the CEO of NorthWest Airlines I believe it was who wrote an article on the effects of speculation, he claimed it increased the cost of gas up as much as 40%, He isn't a dummy I don't think.
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    Apr 26, 2011 3:30 AM GMT
    Claude23 said
    rickrick91 said
    rnch saidyou'd love for that to happen, wouldn't you, ridd?



    Absolutely right, man.
    Isn't it despicable the way the Repubs are HOPING for the economy to TANK - because they think it will help a Repub get elected?
    Talk about UNPATRIOTIC!
    Whatever happened to "Country First"?

    It really is a tragedy for our nation that so many in the Repub party love the Repub party more than they love AMERICA.
    It's shameful.


    When have the Republicans ever been Patriotic? I'm not surprised by any of this.



    They put on a big show of being patriotic, though don't they?
    They're all talk and no action.
  • uppernyguy

    Posts: 17

    Apr 26, 2011 3:48 AM GMT
    When the Dems have the White House, the Repubs want the economy to tank. When the Repubs have the White House, the Dems want the country to tank. It's not unpatriotic. It's politics. As long as there remains only two parties in this country that is the way it will always be.

    We can put a man on the moon and build a space station........but we can't find alternative fuels. Why is that? Because "Big Oil" doesn't want it and they spend billions of lobbying dollars each year to make sure it doesn't happen. They pay it to Repubs and Dems alike. All the U.S. would have to do is THREATEN to release some of its vast oil reserves and the price of crude would drop like an anvil in water.

    Then there is the issue of taxes.......the "rich" (has any one ever defined what that means??) should pay more is the cry of the day. Yet the top 1% pay 50% of the taxes collected. Isn't that a "fair share"? Washington doesn't have a REVENUE problem, it has a SPENDING problem. You can raise taxes all you want, but unless the increased tax revenues go towards paying down the national debt, you're not solving anything.

    Want to get this country headed in the right direction? End entitlement programs.........and start with WELFARE! Talk about a broken system! Lets make it like unemployment........you get it for some many weeks and thats it. Get your ass to work! And don't tell me there are "no jobs". McDonald's is littering the airwaves saying they're hiring 50,000 people. But there are those on Welfare that say "hell, why work when I get almost as much sitting home?"

    So, give me a third party candidate that will cut SPENDING first and put an end to entitlement programs, and I'll vote for him tomorrow!

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    Apr 26, 2011 3:58 AM GMT
    uppernyguy saidWhen the Dems have the White House, the Repubs want the economy to tank. When the Repubs have the White House, the Dems want the country to tank. It's not unpatriotic. It's politics. As long as there remains only two parties in this country that is the way it will always be.

    We can put a man on the moon and build a space station........but we can't find alternative fuels. Why is that? Because "Big Oil" doesn't want it and they spend billions of lobbying dollars each year to make sure it doesn't happen. They pay it to Repubs and Dems alike. All the U.S. would have to do is THREATEN to release some of its vast oil reserves and the price of crude would drop like an anvil in water.

    Then there is the issue of taxes.......the "rich" (has any one ever defined what that means??) should pay more is the cry of the day. Yet the top 1% pay 50% of the taxes collected. Isn't that a "fair share"? Washington doesn't have a REVENUE problem, it has a SPENDING problem. You can raise taxes all you want, but unless the increased tax revenues go towards paying down the national debt, you're not solving anything.

    Want to get this country headed in the right direction? End entitlement programs.........and start with WELFARE! Talk about a broken system! Lets make it like unemployment........you get it for some many weeks and thats it. Get your ass to work! And don't tell me there are "no jobs". McDonald's is littering the airwaves saying they're hiring 50,000 people. But there are those on Welfare that say "hell, why work when I get almost as much sitting home?"

    So, give me a third party candidate that will cut SPENDING first and put an end to entitlement programs, and I'll vote for him tomorrow!





    BS.
    BOTH parties have vowed to cut spending.
    Spending has will be cut.
    But, just cutting spending WILL NOT solve our Debt problem.
    The numbers DON'T add up.
    We also need to increase revenues,

    If lower income Americans are going to have to sacrifice as govt. programs are slashed or eliminated - then the rich must sacrifice too - by paying higher taxes.
    It's only FAIR.
    And IT'S THE ONLY WAY TO PAY DOWN THE NATIONAL DEBT.
    Spending cuts alone won't do it.
    THE NUMBERS DON'T ADD UP WITHOUT RAISING TAXES ON THE RICH.

    But thanks for posting the right-wing talking points.
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    Apr 26, 2011 4:01 AM GMT
    7 years of feast, followed by 7 years of famine, the bible does have some good lessons in it you know.

    All empires fall.

    the "rich" already pay a huge percentage of the total tax bill, increasing their burden will not improve the economy. Transferring wealth, is not creating wealth. The evil rich, provide jobs, support charities, CREATE wealth through business and investing. Reducing their ability to do such will not stimulate the economy, it will do the exact opposite.

    Give a millionaire $50,000 they will use it for more wealth generation, give someone in the bottom 20% $50k, they will blow it on useless consumer goods because "they deserve it". Sending the majority of it overseas where these items are manufactured and again not stimulating the economy.

    Discuss.



  • uppernyguy

    Posts: 17

    Apr 26, 2011 4:05 AM GMT
    Like I said...........if the additional revenues from increased taxes are not used to pay down the debt, you're not solving anything by raising taxes!

    Isn't that what I said?

    But if they are going to raise taxes and use the money for more entitlement programs for the 50% of Americans who pay ZERO taxes, then the snowball will continue to roll down hill!
  • uppernyguy

    Posts: 17

    Apr 26, 2011 4:10 AM GMT
    canuckguy19...................AMEN BROTHER! Somebody else finally gets it!

    Wealth redistribution does not create new wealth!
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    Apr 26, 2011 4:13 AM GMT
    uppernyguy saidcanuckguy19...................AMEN BROTHER! Somebody else finally gets it!

    Wealth redistribution does not create new wealth!


    Exactly, but it does buy votes. Can't spew anymore empty promises to get elected since proven a liar, so the next best thing is cash for votes.
  • BIG_N_TALL

    Posts: 2190

    Apr 26, 2011 4:13 AM GMT
    the end is coming.........
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    Apr 26, 2011 4:15 AM GMT
    What's with the propaganda in this thread? The act of wealth redistribution has been happening for the past 30 years, just from the middle class to the wealthy. Now look at the economy.

    You can thank Reaganomics.
  • uppernyguy

    Posts: 17

    Apr 26, 2011 4:18 AM GMT
    canuckguy19.....

    Exactly right........unfortunately too many people in this country have been brainwashed by "Hope and Change"......and he'll come up with another slick slogan that people will go ga-ga over and we'll be stuck with NO HOPE and only CHANGE IN OUR POCKETS for 4 more years!
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    Apr 26, 2011 4:19 AM GMT
    youngincomo saidWhat's with the propaganda in this thread? The act of wealth redistribution has been happening for the past 30 years, just from the middle class to the wealthy. Now look at the economy.

    You can thank Reaganomics.


    If you are implying that working for the owners of the means of production equals a transfer of wealth from one to the other, you are mistaken.

    There has always been class structure, I would suggest that the standard of living for all groups has gone up dramatically in the past 40 years.

    Having a sense of entitlement does not mean you are actually entitled to something, damn gen y-ers.

    Rich people are usually highly talented, intelligent, or entrepreneurial, or the offspring thereof, and have EARNED what they have within the confines of the system.

    All people are able to take advantage of the rules set out. The reason most don't is because they don't have the capacity too. Why penalize those that have, when they have done so according to societal norms?

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    Apr 26, 2011 4:20 AM GMT
    uppernyguy saidcanuckguy19.....

    Exactly right........unfortunately too many people in this country have been brainwashed by "Hope and Change"......and he'll come up with another slick slogan that people will go ga-ga over and we'll be stuck with NO HOPE and only CHANGE IN OUR POCKETS for 4 more years!


    How are you trying to say Obama will redistribute the wealth from the rich to the poor while simultaneously saying the poor will be broke? (don't say taxes, he's lowered them for the middle class)

    At least make your propaganda consistent.
  • t0theheights

    Posts: 428

    Apr 26, 2011 4:21 AM GMT
    uppernyguy saidLike I said...........if the additional revenues from increased taxes are not used to pay down the debt, you're not solving anything by raising taxes!

    Isn't that what I said?

    But if they are going to raise taxes and use the money for more entitlement programs for the 50% of Americans who pay ZERO taxes, then the snowball will continue to roll down hill!



    Um, those "useless consumer good" (not to mention things like FOOD) are what drive the economy, idiot. The super-wealthy sitting on their GOP kickbacks do nothing for any one. Cutting taxes on the rich HURTS the economy; increased social opportunities for the middle class HELP. Only the brainwashed GOP sheep--of which you are clearly one--fail to get this simple concept.

    The idea that the rich already pay their fair share is utter nonsense. Deep cuts will only further degrade the economy and halt recovery--exactly what the morally bankrupt GOP thugs want.
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    Apr 26, 2011 4:23 AM GMT
    canuckguy19 said
    youngincomo saidWhat's with the propaganda in this thread? The act of wealth redistribution has been happening for the past 30 years, just from the middle class to the wealthy. Now look at the economy.

    You can thank Reaganomics.


    If you are implying that working for the owners of the means of production equals a transfer of wealth from one to the other, you are mistaken.


    No I'm implying that the Rich have been increasing their share of the wealth in this country at the expense of the middle class.
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    Apr 26, 2011 4:24 AM GMT
    canuckguy19 said7 years of feast, followed by 7 years of famine, the bible does have some good lessons in it you know.

    All empires fall.

    the "rich" already pay a huge percentage of the total tax bill, increasing their burden will not improve the economy. Transferring wealth, is not creating wealth. The evil rich, provide jobs, support charities, CREATE wealth through business and investing. Reducing their ability to do such will not stimulate the economy, it will do the exact opposite.

    Give a millionaire $50,000 they will use it for more wealth generation, give someone in the bottom 20% $50k, they will blow it on useless consumer goods because "they deserve it". Sending the majority of it overseas where these items are manufactured and again not stimulating the economy.

    Discuss.







    More BS.

    Taxes were RAISED on the rich at the beginning of the Clinton administration.
    What was the result 8 years later?
    The longest deepest widest economic expansion in U.S. history.
    23 MILLION JOBS WERE CREATED.
    Yearly budget deficits turned into yearly budget SURPLUSES.

    Taxes were CUT on the rich at the beginning of the Bush Jr. administration.
    What was the result eight years later?
    The worst recession since the Great Depression.
    ONLY 3 million jobs were created.
    Bush had DOUBLED the National Debt.
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    Apr 26, 2011 4:28 AM GMT
    youngincomo said
    uppernyguy saidcanuckguy19.....

    Exactly right........unfortunately too many people in this country have been brainwashed by "Hope and Change"......and he'll come up with another slick slogan that people will go ga-ga over and we'll be stuck with NO HOPE and only CHANGE IN OUR POCKETS for 4 more years!


    How are you trying to say Obama will redistribute the wealth from the rich to the poor while simultaneously saying the poor will be broke? (don't say taxes, he's lowered them for the middle class)

    At least make your propaganda consistent.





    uppernyguy and canuckguy (oddly similar names, eh? something stinks!)

    Plus, they're both posting bogus fact-free right-wing talking points.

    It looks like we have a fresh troll infestation.
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    Apr 26, 2011 4:29 AM GMT
    t0theheights saidThe idea that the rich already pay their fair share is utter nonsense. Deep cuts will only further degrade the economy and halt recovery--exactly what the morally bankrupt GOP thugs want.


    Sorry for clarification, what precisely do you mean by "fair share". what to you would be fair? Also for clarification, do you accept that spending as a percentage of the economy has risen significantly over the past 3 years (especially over years the economy was doing much better)?