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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Ramsey Su who wrote (68523)	8/19/2006 10:47:58 PM
From: Wyätt Gwyön	Read Replies (1) of 110194

What is going to happen to struggling economies such as Indonesia, Nigeria? Indonesia is already a net oil importer, so lower prices will help them. in most exporters, oil is a curse that keeps kleptocrats in power. Norway is a notable exception. in general i think the world would benefit from lower oil prices, but i don't think it will happen for long without an exogenous shock such as bird flu. since the US consumes about 25% of global oil, it will be interesting to see what a severe US recession could do to global demand. i think places like Chindia will keep increasing imports regardless, but i don't know if it's enough to offset a severe demand decline in the US. does anybody know how much demand might contract in the US in a "reasonable" recession? i don't think the oil-shock-induced recessions of the 1970s can serve as a guide since we were specifically recoiling from higher oil prices. but demand has kept growing in the face of MUCH higher prices than anyone expected just two or three years ago. what kind of effect did the early 1990s and early 2000s recessions have on US demand--CR or anybody know?

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