Boom Goes The Dynamite: Oil's Price Crash Is Going To Rip The Global Economy To Shreds

Seeking Alpha ^ | 13 Jan 15 | Michael T. Snyder

[eyeamok]

The energy companies owes banks Billions,

And so does EVERYONE else, when the Banks finish stripping the assets from the people as a result of this, the price will go back up. Then we will do it all over again,and again,again...

[raybbr]

For years economists have been telling us low oil prices stimulated the economy. What changed?

[CapnJack]

So I guess if gas was $5.00/gal the “Global Economy” would be booming!

Yeah, whatever. The only thing booming would be oil profits. Everyone else would be paying 1/4 to 1/3 of their earnings for gas for their cars.

Any crash on the stock market will be the result of printing money like it was going out of style and dumping it in the market. Another government created disaster.

[Paladin2]

Derivatives need to die.

[SkyPilot]

I think most economists know it is great for the average consumer and the middle class. They will have more money to spend in other parts of the economy, money for college payments, money to save or pay off other debt, etc.

But.....

The banks will demand they get their loans back, and will put the brakes on further credit. That makes the Fed very, very nervous.

Falling oil prices hitting economic growth: Fed (7 hours ago)

[38special]

I never thought I’d see the day people would be complaining about low gas prices...

[Future Snake Eater]

That was in 2008, just prior to the worst financial crisis since the Great Depression.

Obama said that in every one of his speeches in the 2008 campaign. Then, when he failed to do anything about it except pass Porkulus, he said it was even worse than they'd thought, which, I suppose, means that it was the worst economy since the Black Plague.

[eeriegeno]

The men in this picture are going to be swinging from ropes before this is all over.

Maybe not swinging from ropes but very broke!!! They pumped crude future prices just a tad too high! The chickens are coming home to roost.....

[Bloody Sam Roberts]

How did the "global economy" survive, when oil prices were low enough, that gasoline was 30 cents a gallon?

Because cost of leases, equipment, drilling and labor were also ridiculously low by today's standards. The cost of doing business was low by today's standards, thus were retail prices.

[SkyPilot]

Derivatives need to die.

That's a lot of dying.

The $12 Trillion Ticking Time Bomb

[Amendment10]

Will somebody please refresh my memory? I thought that the financial mortgage crisis associated with 2008 was cause by homeowners who chose to try to fill their vehicle’s tanks on $4 / gallon gas instead of paying their mortgages.

[nascarnation]

I never thought I’d see the day people would be complaining about low gas prices...

I never thought I'd see the day a guy from Kenya named Hussein would be re-elected POTUS with $4/gal gas, 8% unemployment (13% actual), surging food prices, and trillion dollar deficits.

Sadly America has changed profoundly....

[Star Traveler]

It keeps moving down around here ... Tulsa at about $1.65 and Oklahoma City at about $1.55.

[Future Snake Eater]

How did the "global economy" survive, when oil prices were low enough, that gasoline was 30 cents a gallon?

I believe there's been a tad bit of inflation since then. A scintilla, really.

[moovova]

...and the chilluns.

[Karl Spooner]

The banks will demand they get their loans back, and will put the brakes on further credit. That makes the Fed very, very nervous.

Do you think we can survive without the FED?

[SkyPilot]

So I guess if gas was $5.00/gal the “Global Economy” would be booming!

Gas prices went ballistic in the first 5 years that Obama was in office (from something like $1.85 to almost $4.00 for a time).

The banks and those who loaned money to energy companies loved it. Russia loved it. Iran loved it. Venezuela loved it. Energy stocks loved it.

If you or your spouse lost your job, or your wages were flat - you were largely screwed over, and then Obama's Bureau of Labor and Statistics told you that energy and food prices don't count towards inflation estimates - so there was no inflation! Life is grand!

Any crash on the stock market will be the result of printing money like it was going out of style and dumping it in the market. Another government created disaster.

Exactly.

[Chickensoup]

I believe there’s been a tad bit of inflation since then. A scintilla, really.

_________________

thank you for that. Perhaps we need to teach a Freeper Econ course?

[Pelham]

This looks like a lot of fear mongering about nothing. Some high yield bonds issued by some oil patch companies will default. Junk bonds are risky, that’s why they have a high yield in the first place.

I fail to see how that is going to bring down the world economy. The majority of the world doesn’t own high risk, high yield junk bonds but they do benefit from lower energy costs.

This is hardly comparable to the housing bubble when trillions of dollars of high risk paper was misleadingly rated AAA. Investors who bought the high yield energy sector junk bonds knew that they were taking a risk, this wasn’t the case during the housing bubble.

[VideoDoctor]

Your post #5 asks questions seldom thought about by anyone.

I liked it a lot.