Oil price spike has wide economic impact

[Amerigo Vespucci]

Source: MSNBC

As dire forecasts about runaway oil prices become reality, it’s impossible to know how much higher they’ll go. But the impact of the price surge already is being widely felt. And if prices go much higher, the damage to the U.S. economy will be deeper and wider than the fallout from the run-up so far.

Oil prices have doubled in the past year and have shot up nearly 50 percent since January to a record $135 a barrel. Much of the rise appears to be driven by speculators betting that tight supplies — or outright shortages — will push prices even higher.

Consumers — already hit with rising prices and flat wages — are being stretched further. As the Memorial Day weekend kicks off the summer driving season, gasoline prices are at record levels, reaching a national average above $3.83 a gallon. Some analysts predict the average will break past $4 as early as next week. In some parts of the country, prices are already closing in on $5.

“We're already in a mild recession,” said Lakshman Achuthan, an economist at the Economic Cycle Research Institute. “I think if we go towards $150 (a barrel), we start talking about something worse than a mild recession.”

Read more: http://www.msnbc.msn.com/id/24778287/

[glowing]

1. Please, most people have been living like its a recession already.

Now, we will be living like its a depression...

[bdamomma]

16. exactly what is going to happen.

[dipsydoodle]

2. The root cause is the war in Iraq

You play with fire : you burn your fingers.

[tama]

3. Root cause

Iraq war is just one of the symptoms. For the root cause we must dig much much deeper. All the way to the bottom.

[Bandit]

13. Exactly, IMO the Root Cause is Republican Rule

It is their disastrous foreign policy, their arrogance and belligerence, their huge Deficit Spending to give to the very wealthy, but most os all it is their Lying. The world can not trust constant LIARS so our dollar is becoming worthless.America said it would not torture but the Bush* Cabal does just that. The world doesn't like that and won't deal with the USA because of it..Republican Rule has destroyed America's Reputation as a fair and caring nation. Now we are seen as a brutal, dishonest, world bully.

[tama]

14. Still deeper

getting much closer to the Root Cause when looking at social mechanics of scapegoating (and how they play out at individual level, wich takes serious soul searching.)

[Name removed]

4. Deleted message

Message removed by moderator. Click here to review the message board rules.

[mdmc]

9. rant on

[bluesmail]

5. I can't remember the last time I got excited about any holiday

Knowing the world is burning, there's no joy left. I await each day for ANY good news to celebrate.

[disenfranchisedgal]

6. Tell me about it

I'm cutting back on food for that reason.

[Canuckistanian]

7. ... and the "No shit, Sherlock" award goes to.......

MSNBC!

Nice prognostication, assholes. We had NO idea.

[Zachstar]

8. If we break 150 USD we are talking about Depression

And no that is not doomsday conspiricy stuff that is reality as Trucking companies are RIGHT on the edge as diesel keeps rising. Any more and they are going to have to start Jacking prices sky high and/or start to go out of business. Meaning masses of people who have done little more than trucking their whole lives will hit the job market..

It's a disaster waiting to happen. No effective trucking = collapsed economy.

[texanwitch]

10. I have been watching the price of gas and diesel climb and keep waiting for

the bottom to fall out of our economy.

I think we are a lot closer to a collapsed economy than I like to think.

To many Americans are right on the edge right now.

Just wish our Democrats would do something beside hold hearings.

[BadgerKid]

11. It's the speculators.

If I were an oil producing country, I would have every incentive to STORE or certainly not increase production, believing that I could sell it for a higher price months later.

Besides curbing oil and oil-derived products at the level of individuals, what can be done to end the speculation? Or do we have to wait wait the bubble, assuming it's a bubble, of course?

[Nihil]

12. Oops. In-store cleaner to aisle 3 - we seem to have a spillage of faith.

> ... assuming it's a bubble, of course?

Do I hear a hallelujah? OK, maybe not ... :hi:

> If I were an oil producing country, I would have every incentive
> to STORE or certainly not increase production, believing that I could
> sell it for a higher price months later.

If you were an oil producing country and you'd been paying attention
to your production & exploration rates, you would have every incentive
to STORE or certainly not increase production, believing that you would
need it for domestic consumption in the near future.

A wise person will recognise the folly of selling the very thing that
they will need in a few years time to survive - when the price to buy it
back will be *far* higher.

[donco]

17. Then of course you would drive you customers into bankruptcy;

I don’t think so.

[ohio2007]

15. California rep wants to nationalize oil companies

but she can't get past the freudian slip word;

http://en.sevenload.com/videos/5R0Ex3l-Waters-oil

Anyway, don't knee jerk react the source of the video, just listen closely to the oil exec about wanting to extract oil in the US .

end foreign dependency under the threat to national interests