At first glance it is hard to see how oil, interest rates and debt are connected. Two of them are human constructs while oil (fossil sunlight), a gift from Mother Nature, took tens of millions of years to process.
Articles: interest rates (15)
There are many who believe that the use of energy is critical to the growth of the economy. In fact, I am among these people. The thing that is not as apparent is that growth in energy consumption is dependent on the growth of debt.
Why are commodity prices, including oil prices, lagging? Ultimately, the question comes back to, “Why isn’t the world economy making very many of the end products that use these commodities?”
What follows are the continuance of my research, discussions, observations and thoughts around the nexus of debts, interest rates and the oil price.
The price of oil is down. How should we expect the economy to perform in 2015 and 2016?
The world economy is slowing down and the authorities are fretting.
How far the oil price will come down and for how long it will stay “low” is now anyone’s guess. A declining price results from weakening demand while supplies are improving.
The standard way to make forecasts of almost anything is to look at recent trends and assume that this trend will continue, at least for the next several years.
Academic researchers Carmen Reinhart and Kenneth Rogoff have become famous for their book This Time is Different: Eight Centuries of Financial Folly and their earlier paper This Time is Different: A Panoramic View of Eight Centuries of Financial Crises. Their point, of course, is that the same …
In a recent speech to the International Monetary Fund economist Larry Summers argued that since near zero interest rates have not stimulated GDP growth sufficiently to reach full employment, we probably need a negative interest rate.