David Rosenberg of Gluskin Sheff calls the current doubling in the spot price of oil a “game changer:
“There have been only five times in the past 70 years when this has
happened within a two-year time frame: January 1974, November 1979,
September 1990, June 2000, and August 2005. And now, December 2010. . . .Of the five instances cited above, all but one involved a recession for the U.S.
economy and that was in 2005 during the height of the credit and housing
boom, which acted as a huge offset. But oil prices did keep rising and managed
to outlast the euphoria in credit and residential real estate, so the recession may
have been delayed at the peak of the ‘growth rate’ in the oil price, but it was not
derailed as history shows.”
I must admit: I have never seen that analysis previously. Dave’s trailing 24 month oil chart is below
>
Spot Oil Price: West Texas Intermediate (Prior ’82 = Posted Price)
(24-month percent change, $/barrel)
What's been said:
Discussions found on the web: