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

To: mishedlo who wrote (62573)	6/2/2006 5:53:31 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

you can look at it per capita if you like, but the comparisons i've seen are on aggregates. yes, US consumption of oil is understated due to China outsourcing. but that's all part of the hollowing-out of US mfg that's been going on for a couple decades. the oil consumption growth/GDP growth relationship has been pretty stable in the US since 1983 (this was a "paradigm shift" from the relationship existing from 1950 until the Iranian revolution of 1979). see: Message 22488809 i'm pretty sure somebody who's good with stats like CR or the guys at CI could use oil consumption data to predict a US recession in near real time with good reliability. the caveat is that this assumes we don't have a breakdown in the CL/GDP relationship of the past 23 years. that probably will happen at some point thanks to peak oil. perhaps it already would have happened except for the housing bubble. if past is prologue, we will have a period where consumption contracts considerably. obviously it will take more than $3 gas to make this happen. maybe $4 or $5. we will have a 3- or 4-yr period where the economy readjusts to the new reality of secularly higher CL, and then a new relationship will be established (with, ideally, GDP growth occurring at flat CL consumption). of course, if peak oil is for real then we will have constantly declining CL consumption for the rest of the century and all bets are off.