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Strategies & Market Trends : Waiting for the big Kahuna
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To: Carl Zbad who wrote (1127)6/22/1997 6:15:00 AM
From: Val   of 94695
 
Carl:

By themselves I doubt fossil fuel will be the source of a great economic calamity any time soon. However, in that U.S. dependence on fossil fuels outside of U.S. borders steadily increases, a rise in prices will contribute to existing trade imbalances and rising U.S. trade deficits. These deficits are at levels which represent trouble, even a currently ticking time bomb.

A stabilization of oil prices BELOW existing levels after a readjustment must be highly unusual and influenced largely by other factors, like an economy that headed south as the oil price adjustments were underway.

This is to say that oil prices will, as you say, rise as demand continues upward and supply, at current prices, remains constant (as you also acknowledge). Rising demand in developing countries like China will contribute to this. Rises in oil prices adversely affect our already troublesome showing on the balance of trade - increasing our already problematical trade deficit. At some point, nobody knows exactly where or at what level, that defict comes back to bite us: big kahuna time.

Thank you for your views, should like to hear from you again. Do you see the above a bit differently? Surely the facts and logic above are faultless!?

Val
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