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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (12780)	4/28/2004 7:25:28 PM
From: Wyätt Gwyön	Respond to of 110194

makes sense to me. there's always a chance for a shock but they're rare events. the world has been using oil for 100 years, basically, and we had oil shocks in just two years, both in the 1970s. having said that, both shocks were related to tensions in the ME, and it seems the situation is as bad now as it was then. at the time of the 1973 oil shock, OPEC cut production 5% per month, and this caused a TENFOLD increase in the price of oil. it's hard to imagine anything like that happening today, but i suppose it's not impossible. we would basically need to see oil go to $350 in a couple weeks. the only thing that i think could cause that is a major terrorist attack on Saudi facilities, as has been discussed on these threads. even that might only take it to $100. and what about oil at $100? inflation-adjusted, it wouldn't be as bad as the spike to $50 in 1979, when the US economy was much more manufacturing-oriented. and i believe oil was frequently above $50 in 2004 dollars in the early 80s as well. but i guess it would screw things up plenty good in the short term :( i continue to think immediately higher oil prices (like $50-60) would be beneficial in the long run, because it will encourage immediate conservation and investment in alternatives.