Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Joined: Mar 04, 2005 Posts: 2765 Location: New Zealand
Posted: Wed Jun 25, 2008 7:10 pm Post subject: World Economy Would Collapse If Oil Hit $200, Deutsche Says
World Economy Would Collapse If Oil Hit $200, Deutsche Says
Quote:
The global economy would collapse if oil hit $200 a barrel, said the top energy analyst at Germany's largest bank.
``Two-hundred dollar oil would break the back of the global economy,'' Deutsche Bank AG's Chief Energy Economist Adam Sieminski said in an interview today in Tokyo. ``Next step after $200 would be global recession and bad news for everybody.''
bloomberg _________________ Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
Joined: May 06, 2006 Posts: 873 Location: Tustin, CA
Posted: Wed Jun 25, 2008 8:48 pm Post subject: Re: World Economy Would Collapse If Oil Hit $200, Deutsche S
Does this mean we won't be able to fly to Grammy's house each Christmas?! _________________ Skeptical scrutiny in both Science and Religion is the means by which deep thoughts are winnowed from deep nonsense-Carl Sagan
Posted: Wed Jun 25, 2008 10:15 pm Post subject: Re: World Economy Would Collapse If Oil Hit $200, Deutsche S
For once I think they are being a bit melodramatic. I can see bankers being unhappy but this is only another 60 dollar increase on our current prices and about and additional dollar on a gallon of gas.
I'd guess this would result in at most a 5% contraction in the worlds economy not including growth if you included growth slowing down first then 200 dollar oil would introduce a mild and patchy recession.
I think 300 will send us closer to a global recession but we won't hit one until oil is at 500 a barrel. But then it should pretty much go strait into a depression.
At basically 140 a barrel we still have housing in the US insanely priced with a slow housing collapse underway. At the rate its moving its 2010 or so before prices even return to pre-bubble levels in most areas.
Pretty much the same for the rest of the overheated economy. Unemployment is just now picking up steam. No way 200 a barrel is going to dramatically change this. Overall people still have plenty of room to absorb higher fuel prices. Many countries still have significant subsidies. And the US economic stimulation thing was really a gasoline subsidy in disguise for those smart enough to use it correctly. I suspect we will get a similar handout next year that more people will devout to gasoline.
Expansion esp building etc that most banks depend on will drop sharply so a depression in finance will probably happen but this is a banking problem not a overall economic problem.
I do agree that the combination of 200 oil and the recent and ongoing banking fiasco will probably cause serious problems for the profitability of the banking sector and this will work to stop growth but the end of growth is not the end of the world economy. Even the first few years of shrinking is not going to be a huge problem.
Its when we hit the 300-500 range that real problems start cropping up.
Posted: Fri Jun 27, 2008 6:25 pm Post subject: Re: World Economy Would Collapse If Oil Hit $200, Deutsche S
Since the lions share of oil consumed is used for transportation, the primary affect of $200 - $250 oil will be a paradigm shift in the way we get around. Other forms of transportation will be come substituted - bicycles, mopeds, trains (ala warren buffet), less air travel etc. And that's not such a bad thing considering the reduction in greenhouse gasses emissions. Gas usage is down less than 2% at $140 so it hasn't even begun yet.
The affects of inflation will definitely be felt and have to be delt with and that's a wild card. The US had crazy inflation in the 70's and survived that.
So collapse? Its going to take a lot more than $200 oil. Its the developing nations that are going to have the most problems. _________________ http://www.tn-labs.com/
Posted: Fri Jun 27, 2008 7:54 pm Post subject: Re: World Economy Would Collapse If Oil Hit $200, Deutsche S
anony_mus wrote:
(...)
So collapse? Its going to take a lot more than $200 oil. Its the developing nations that are going to have the most problems.
I disagree, everyone will have problems with ever increasing oil prices. I don't think "developing" and "developed" nations are wise and accurate descriptions of the reality of countries*... but it's the "developed" countries that are oil junkies.
*same example: Costa Rica is "developing" but it has more than 80% of renewable and clean electricity generation (0% is nuclear... which may have potential in the future)... and world variables like literacy similar to "developed" nations. _________________ @deviantART @wordpress @hi5
Posted: Fri Jun 27, 2008 8:06 pm Post subject: Re: World Economy Would Collapse If Oil Hit $200, Deutsche S
anony_mus wrote:
Since the lions share of oil consumed is used for transportation, the primary affect of $200 - $250 oil will be a paradigm shift in the way we get around. Other forms of transportation will be come substituted - bicycles, mopeds, trains (ala warren buffet), less air travel etc. And that's not such a bad thing considering the reduction in greenhouse gasses emissions. Gas usage is down less than 2% at $140 so it hasn't even begun yet.
The affects of inflation will definitely be felt and have to be delt with and that's a wild card. The US had crazy inflation in the 70's and survived that.
So collapse? Its going to take a lot more than $200 oil. Its the developing nations that are going to have the most problems.
As horrible as it sounds and I can feel the pain of lower class Americans(my family is hit pretty hard by this.) I hope gas prices keep getting higher.
I know short term it isn't very good for us but long term Americans need this.
America needs to become a nation of public transportation and less oil consumption. We need to take this as a lesson and work on renewables.
Do you seriously think anyone would care about renewables or public transportation if gas was 1 buck a gallon?
No.
Reality has hit Americans across the face like a hot pan and now we must adjust and work to adapt.
Joined: Apr 09, 2007 Posts: 6374 Location: Alaska (its much bigger than Texas).
Posted: Fri Jun 27, 2008 8:20 pm Post subject: Re: World Economy Would Collapse If Oil Hit $200, Deutsche S
I don't understand the panic by the Deutschesbank.
The EU has a tax rate on fuel of approximately 100%. Thats the reason gas costs twice as much in EU countries as in the U.S. This smart policy gives them the ability to to fiddle with their gas price.
The EU could simply reduce or drop their gas tax entirely, as French President Sarkozy is suggesting, and actually have gas prices LOWER then today even if oil goes to $200/barrel. _________________ "People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." -- George Orwell
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Sat Jun 28, 2008 7:24 am Post subject: Re: World Economy Would Collapse If Oil Hit $200, Deutsche S
memmel wrote:
For once I think they are being a bit melodramatic. I can see bankers being unhappy but this is only another 60 dollar increase on our current prices and about and additional dollar on a gallon of gas.
I'd guess this would result in at most a 5% contraction in the worlds economy not including growth if you included growth slowing down first then 200 dollar oil would introduce a mild and patchy recession.
I think 300 will send us closer to a global recession but we won't hit one until oil is at 500 a barrel. But then it should pretty much go strait into a depression.
At basically 140 a barrel we still have housing in the US insanely priced with a slow housing collapse underway. At the rate its moving its 2010 or so before prices even return to pre-bubble levels in most areas.
Pretty much the same for the rest of the overheated economy. Unemployment is just now picking up steam. No way 200 a barrel is going to dramatically change this. Overall people still have plenty of room to absorb higher fuel prices. Many countries still have significant subsidies. And the US economic stimulation thing was really a gasoline subsidy in disguise for those smart enough to use it correctly. I suspect we will get a similar handout next year that more people will devout to gasoline.
Expansion esp building etc that most banks depend on will drop sharply so a depression in finance will probably happen but this is a banking problem not a overall economic problem.
I do agree that the combination of 200 oil and the recent and ongoing banking fiasco will probably cause serious problems for the profitability of the banking sector and this will work to stop growth but the end of growth is not the end of the world economy. Even the first few years of shrinking is not going to be a huge problem.
Its when we hit the 300-500 range that real problems start cropping up.
You've done great forecasting the price of oil - when do you see $300 oil coming?
Despite some news headlines, such as China and India reducing energy subsidies, the underlying trend is for more government intervention on a relative scale. In the US, a combination of rebates, tax cuts, or direct energy subsidies will be put into place to soften the blow of high energy prices. I look for a second round of government action (the first being rebates) to be put into place even before this year's election.
That's because we are heading for a significant recession rather soon. The world economy will only collapse when (1) existing infrastructure built on cheap oil wears out or becomes useless and/or (2) the price of oil gets to be somewhere about $300 in inflation adjusted June 2008 dollars.
However I believe the inflationary forces unleashed by governments around the world will accelerate monetary inflation (as opposed to resource price inflation) and we may not see an economic collapse - which I define as a drop of 10% in economic activity from peak - until oil gets about $500. _________________ It's already over, now it's just a matter of adjusting.
Joined: May 18, 2006 Posts: 4867 Location: Minneapolis, MN
Posted: Sat Jun 28, 2008 7:34 am Post subject: Re: World Economy Would Collapse If Oil Hit $200, Deutsche S
Graeme wrote:
World Economy Would Collapse If Oil Hit $200, Deutsche Says
Quote:
The global economy would collapse if oil hit $200 a barrel, said the top energy analyst at Germany's largest bank.
``Two-hundred dollar oil would break the back of the global economy,'' Deutsche Bank AG's Chief Energy Economist Adam Sieminski said in an interview today in Tokyo. ``Next step after $200 would be global recession and bad news for everybody.''
Joined: Dec 18, 2004 Posts: 4991 Location: One Mile From the Columbia River
Posted: Sat Jun 28, 2008 5:35 pm Post subject: Re: World Economy Would Collapse If Oil Hit $200, Deutsche S
It's going to take a lot more than $200/bbl oil to stop The Machine. I was just in Malaysia and even with the limited and lingering (although recently modified ) subsidy, the freeways around KL and the primary N/S freeway are jammed with cars and trucks totally ignoring the posted speed limit speeding along as if the stuff was free.
This from a nation with a per capita GDP almost exactly the same as Mexico's. Interestingly, they're in a similar position too. Both about to become net energy importers after many decades sitting pretty in 'export land'.
So, IMO, if a nation like Malaysia can keep trucking along (mostly) just fine with $140/bbl oil, North America and Europe and the rest of the developed world can also (mostly) make ends meet with 2, 3, or 4 times the per capita income on $200/bbl oil.
So, in conclusion, Deutsche Bank is blowing political smoke for some reason. Maybe they're pushing to get the EU nations to reduce their petrol taxes. Maybe something else. I'm not sure what is the General Breaking Point, but $200/bbl oil isn't anywhere near Planet Doomsville folks. So relax. _________________ Got Dharma?
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