Wednesday, 5 October 2011

Oil back at $100: It's The Recession ...

Patient readers (Sid and Doris Bankers) may recall a prediction that oil would end 2011 in 3 figures and stay there forever - barring GlobalRecession2. Well, it's clinging on to the big round 100 mark by its fingernails, but with GR2 a racing certainty all C@W oil bets are formally off.

Where does this leave my hope that high energy prices would precipitate an early end to Crapper Huhne's mad & expensive energy policy ? Actually, GR2 will probably do for it just as well: CO2 emissions will fall with industrial output and reduced household budgets, and sooner or later Osborne will simply cancel inflationary green impositions (though not the green taxes, he needs the revenue). There will be no finance available for big new capital plant (despite Charles Hendry's pathetic bluster), and a make-do-and-mend strategy will be cobbled together to stop the lights from going out.

I hope.


ND


Image by Angela Anderson-Cobb

7 comments:

Blue Eyes said...

Interesting point made on FT Alphaville that oil prices have pretty much decoupled from western marginal demand and are now being driven more by Asian factors.

Obviously, it remains to be seem whether China et al. can continue to boom while the west stagnates...

Nick Drew said...

whether China et al. can continue to boom

indeed: and again from Alphaville, maybe not ...

James Higham said...

I should think GD2 would be a better term.

Electro-Kevin said...

GR2 may hold back consumption and result in a loss of government revenue (which is what green taxes are really about.)

So we're going to get taxed to pay for having fat arses instead.

Is an econonomic bubble as much of a worry for China as it is for us ?

I mean it's not as though they seem to much care about their people being poor or unhappy.

Budgie said...

GR2 (or even GD2) not likely because the lizards will "print" more money as soon as it looks set. Or in the euro's case get the dim Brits (led by the dim twins: CMD and Boy George) to bail it out.

What we are in for is 'low' level inflation (c 6%) for years as, around the West, savers are made to pay for the excesses of borrowers. 'Leveraging' the EFSF to fool the German taxpayer, anybody?

And the euro is not going to disappear imminently. I am amazed by how many eurosceptics (who should know better) persistently underestimate the will to power, the ruthless cunning and the cynicism of the EU elite who will keep the euro alive at any cost to us.

Electro-Kevin said...

Yeah, Budgie. We're going to have to pay for excesses of borrowers and the excesses of people who are so greedy that they've got fat.

That won't do anything for inflation will it.

What a country !

Nick Drew said...

persistently underestimate the will to power, the ruthless cunning and the cynicism of the EU elite

- nailed it, budgie, it's almost inspiring to see a 'vision' pursued with such single-mindedness: might almost say fanatical

they do seem a bit disorganised, though ... I expect they have plans for fixing that