Oil Prices and The Economy.
We had Oil price Hit in the 140's in 2008, it is $127 today, so lets not act like we haven't seen these prices before, because we have. Keep in mind 140 in 2008 is not the same and $140 today.
1) Obviously inflation over time whether we plug in 2 or 3% as a number that is more normalized it shows that we are nowhere near 2008, in fact we are probably lower than 2011 spike if we adjust for inflation. And obvious we don't even need to adjust for inflation in 2008 to say it is lower now.
2) We drive but it is important to note cars have been improved, and I'm talking about just the ones that take gas, the miles you get per gallon have climbed a ton. Hence we use less driving around than we did in 2008, add in hybird and electrical vehicles, we are using less gas to get from point A to Point B that is simply a fact.
3) We can't overlook I would be more worried if this hit us say in november, everyone worries about summer driver season, which is true. But heating our homes whatever energy source you use, will be coming to and end if It already has in most post parts of the US for months. That will help.
4) Oil prices on a chart are so overbrought, in fact the last time they were this overbrought was 2008, needless to say the price comes down significantly months later after you get this overbrought on a chart historically.
We have no clue how far they will take the price, because there is a ton of speculation in on oil and all commodity prices right now, because as of right now Russia is still producing oil and the rest of the world outside of us is still gonna buy it most likely. So In my opinion this is a short-term shock here, which I think will come back down. Now the price Europe is paying well that is recessionary I do agree if It goes for any length of time. I think we are working are way to a blowoff top, where that is though is hard to predict when anything gets this kind of momentum. A stock, a commodity, it really doesn't matter when a chart looks like this it always comes down hard, but sometimes it goes up much further than you think it would, before it does so in my opinion. All is just my opinion, and I could always be wrong though.
