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Gold/Mining/Energy : Oil & Gas Price Economics
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To: excardog who wrote (265)9/15/2000 10:23:09 PM
From: Alan Brezin  Read Replies (2) of 350
 
I never agreed with the concept that an increase in the price of a necessity like energy leads to inflation since we all need it and have less money available after paying so much more for it. Less discretionary income, the result of paying more for a basic necessity like energy, eventually leads to a slow down, much as confiscatory taxes would cause. These higher energy costs are like taxes, imo, and, unlike the government which turns around and spends extra tax dollars fueling inflationary pressures, the energy companies only spend it on a few executive bonuses and some dividends to a relative few, imo. Further foreign economies dependent upon higher priced energy get fewer orders from a slowing US and their economies slip into recession fueling further recessionary pressure on the US economy since they then can't buy as much US exports.

Net net higher energy costs are recessionary, imo.
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