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Oil Crashed the Economy
I am sure I will get responses to this title like, "But Oil is at 48 dollars now," or "Don't you know Peak Oil is a myth?" These are quite understandable and reasonable statements. Yet if we peer into the time line of events we will see oil prices did in fact have a major impact on bringing us to where we are today.
Since 1992 Americans and the Western World began to live increasingly off of lines of credit instead of cash on hand. Businesses expanded using credit and homeowners borrowed more. It all worked until the inflation started in 2003 and to battle this the FED raised interest rates. At the same time the oil producing countries decided to profit from the boom and especially in the first few years after 9-11. The problem is that they got ahead of themselves and where oil just a few years ago was at 27 dollars by the summer this year it was at 150 dollars. This hike in energy prices sent out already fragile economy into melt down mode and of course to compensate oil crashed with it. What goes up must come down. It's kind of sad. If future cars were taken more seriously we could have avoided all of this.
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