PeakTrader.com

[administrator]

PeakTrader said...

It's not only the massive government spending spree that created $1.5 trillion annual budget deficits, it's also the recovery taking place at one-third speed after the severe recession.

Also, these huge deficits have taken place before the 80 million Baby-Boomers begin to retire.

Another oil shock, or any severe shock, will slow economic growth and worsen budget deficits.

There's little the government can do to stimulate the economy (e.g. significant tax cuts), if that becomes necessary.

If oil rises to $150, there may be a double-dip, which could turn into a depression, since the country is in a position of weakness after two years of "Obamanomics."

If it lasts, oil price spike a threat to nascent economic recovery: economists
23 Feb, 2011

"Economists note that all recessions since the Second World War were preceded by spiking oil prices.

If oil remains at elevated levels for four or five months, that could filter through into higher inflation and cause central bankers to start raising interest rates.

Food prices have been rising for months, but recent unrest in the Middle East has also pushed oil to heights not seen since the lead-up to the previous recession."