Oil at $80/barrel=recession

[pscot]

http://network.nationalpost.com/np/blogs/francis/archiv...

The turmoil since August 2007 has not been blamed directly on oil prices but there’s a link.

“The US has experienced six recessions since 1972. At least five of these were associated with oil prices. In every case, when oil consumption in the US reached 4% percent of GDP, the U.S. went into recession. Right now, 4% of GDP is US$80 a barrel oil. So my current view is that if the oil price exceeds US$80, then expect the U.S. to fall back into recession,” wrote Steven Kopits, managing director for U.K.-based energy-consulting and -research firm Douglas-Westwood LLC in New York.

Kopits is a poster boy on all the “peak oil” websites and doomsayer blogs, and his metric on the link between recessions and oil price is interesting. If Kopits is correct, so much for “green shoots”. They will be trampled under foot over and over again unless there is a sudden spike upwards in GDP growth disproportionally more so than oil price increases.Here is the roller-coaster cycle he points out: Higher oil prices mean recessions, recessions mean less consumption then lower oil prices which leads to less exploration and supply which leads to higher oil prices and recession...

[Teaser]

1. we're always doomed

no matter what.

[liberal N proud]

2. How greedy are those who control the price?

[notesdev]

3. It's a symptom

the disease is debt, with serious complications from a widespread infection of corruption.

[LeftHandPath]

4. Exactly right notes...

The US is the global reserve currency.

As the dollar continues is collapse, commodities priced in those dollars will be used to hedge the falling currency values.

There is no escaping the math of compounding interest on our enormous and ever growing debt.

[troubledamerican]

5. Israel attacks Iran = Oil @ $300/barrel