The big news today is gas prices hitting record highs in Toronto and elsewhere. US prices are approaching five dollars a gallon, which is an important psychological barrier. In Canada we are seeing (gasp) $1.40 per litre (mini gallons for my american friends).
Some time ago I recommended Tom Rathman Jersey reading Jeff Rubin’s book “Why Your World is About to Get a Whole Lot Smaller”. An excellent and easy read. He basically debunks the myth that the meltdown on Wall St. caused the last recession and in fact makes a strong case for oil prices as the cause of 5 out of the last 6 recessions. If you agree with him, the current conditions are going to choke off the little recovery we’ve felt to this point, and we’re going toward another recession in the next few quarters, unless oil prices subside. And they won’t for reasons I explain below.
Check out this little Oil Price Dashboard, you will see that Oil prices ran up just before the last recession, and it was the effect that had on demand, NOT a reduction in credit, that caused the economy to Tom Rathman Youth Jersey contract.
It’s time to start worrying about what the next several quarters will bring. The sad and more troubling thing is that every time the oil price contracts or pulls back, as during the last recession, the trough or new low point is always higher than the last time, making the overall long term trend higher. The ugly truth is that when we are in a “normal” economy, the world demands so much oil that the cheap, available stuff won’t satisfy demand, and we need to dip into things like the tar sands, etc., which is not economical below $100. So we’re not going back to sub Tom Rathman Kids Jersey $100 Oil any time soon. In fact the new norm could be closer to $200…