Wednesday, November 18, 2009


Oil Price and Recession

I was going to write about this CNN article “Forget $100 oil. $80 oil is a problem,” and then noticed that Robert Rapier over at R-Squared Energy Blog has already said pretty much what I was thinking. So do read that post (as well as the CNN article) if you have the time.

I’d just like to add one thing. Whenever debate starts on what triggered this recession, some people argue that over-leveraging was also a big cause or even the biggest cause. Certainly over-leveraging played a big part, but in that respect I want to point out once again the immortal words of Colin Campbell when he said, “Tomorrow’s Expansion was collateral for Today’s Debt.” This very succinctly describes how rosy expectations of more growth — courtesy of fossil fuels — led all parties concerned to lend and borrow with abandon. Therefore when we start digging into the mountain of debt, we likewise “strike oil.”

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