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Friday, January 16, 2015

Boom Goes The Dynamite: The Crashing Price Of Oil Is Going To Rip The Global Economy To Shreds

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.

What amazes me is that there are still many economic “experts” in the mainstream media that are proclaiming that the collapse in the price of oil is going to be a good thing for the U.S. economy.

The only precedent that we can compare the current crash to is the oil price collapse of 2008. You can see both crashes on the chart below…

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7 comments:

Anonymous said...

What an idiot!

Anonymous said...

Complete bull!

Anonymous said...

Ditto!

Anonymous said...

So, if I had to pay $80 to fill gas tank 3 months ago and now it only cost $60 this is bad for U.S economy?
I now have an extra $20 to spen at local business.

Low gas prices are good

Peace in the Park said...

Warren Buffet cannot give Millions to the Democratic Party if we are not paying 3:00 a gallon or more...


Raise Gas prices so Democrats can have more Money

Anonymous said...

there are always winners and losers, this time the american consumer is the winner and the big banks who laid out for these loans along with the oil concerns will be taking the hit. and you want us to cry? lmao!

Anonymous said...

The banks don't need to worry the government will bail them out and just raise the gas tax.