Traditionally a rise in oil prices would cause inflation which would lead to a rise in interest rates and lower stocks. So why is a lower price of oil causing markets to crash? I know China’s economy is weaker which doesn’t help (which is rather unfortunate since they are used as cheap labor slaves and have their country badly polluted by companies who don’t have to worry about a Clean Air and Water Act in spite of the country leaning to the left supposedly.) , but I otherwise don’t understand it. I guess Big Oil has become a huge part of the stock market. Of course this probably means we’ll have a bad economy soon which will cut mental health funding and mess a lot of people up.
I fear for the future
But then I sip on one of these and think everythings gonna be alright
That’s very funny!
It’s an indicator of too much supply vs. too little demand.
Alternative sources of oil (e.g. fracking, shale, new exploration) and energy in general (solar, wind, natural gas, fuel cell) cost the same as at least $50 / barrel of crude to get an equal amount of energy from them. Investment in alternative energy tends to fall off in a hurry when there’s a glut. This has happened five times (I think) since 1973.
I’ve followed a psychiatrist in Vancouver who is monitoring the economy thinking it is going to tank and thinking the disabled will be hit the hardest when hardship hits.
Things will be challenging, but not impossible here in Canada. There will be some upheaval in the provinces used to huge transfer payments from Alberta – the money is no longer there to ship east. I think basic programs will be okay (e.g. supports for the disabled), but the days of dirt cheap daycare in Quebec are nearing an end.
Blood in the streets
One reason I’ve heard why a lower price for oil is hurting the economy is that a lot of investment strategists had hedged their investments with oil investments. It seems that there is an up side and a down side to every economic development. I think that on balance and in the long run a lower price for oil will benefit our economy. It’s like getting a pain free stimulus to the economy when the price of oil goes down.
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