The drop in oil price is good not bad – for the USA. The great recession was associated with and exacerbated by a spike in energy prices. That is the opposite of what we have now. Every fiscal economy is built upon an underpinning energy economy. Cheaper energy invigorates an economy by freeing up consumer and industry cash for discretionary spending and investment. Because only the US is fracking, and because of our private land and mineral rights ownership and still somewhat free market economy, and because we do not depend on energy exports to sustain our economy, we are now blessed with a localized energy price trough compared to the rest of the world, and are suddenly a resurgent economic superpower. Meanwhile, the petro states (Russia, Venezuela, KSA, Kuwait, Iran, Iraq, Qatar, Nigeria, etc), are watching their cash cow die and facing the possible collapse of their fragile political rentier economies. And Europe and Asia, including China, linger in recession and stagnation, unable to drive the price up by increasing consumption. The value of each nation’s fiat currency is ultimately also linked to its genuine net contribution to the world’s economy, and as a net generator of energy and finished fuels and consumer products, the US dollar is also increasing in value with respect to other nation’s currencies. This good fortune is purely a product of private ingenuity and investment, and is happening despite the Obama administration doing everything possible to drive up the debt and encourage unemployment and destroy America's credibility abroad and slow the economic recovery. Cheer and applaud the fall of the price of oil. It is good for your wallets and good for America.
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Not Just Oil: Guess What Happened The Last Time Commodity Prices Crashed Like This?
The drop in oil price is good not bad – for the USA. The great recession was associated with and exacerbated by a spike in energy prices. That is the opposite of what we have now. Every fiscal economy is built upon an underpinning energy economy. Cheaper energy invigorates an economy by freeing up consumer and industry cash for discretionary spending and investment. Because only the US is fracking, and because of our private land and mineral rights ownership and still somewhat free market economy, and because we do not depend on energy exports to sustain our economy, we are now blessed with a localized energy price trough compared to the rest of the world, and are suddenly a resurgent economic superpower. Meanwhile, the petro states (Russia, Venezuela, KSA, Kuwait, Iran, Iraq, Qatar, Nigeria, etc), are watching their cash cow die and facing the possible collapse of their fragile political rentier economies. And Europe and Asia, including China, linger in recession and stagnation, unable to drive the price up by increasing consumption. The value of each nation’s fiat currency is ultimately also linked to its genuine net contribution to the world’s economy, and as a net generator of energy and finished fuels and consumer products, the US dollar is also increasing in value with respect to other nation’s currencies. This good fortune is purely a product of private ingenuity and investment, and is happening despite the Obama administration doing everything possible to drive up the debt and encourage unemployment and destroy America's credibility abroad and slow the economic recovery. Cheer and applaud the fall of the price of oil. It is good for your wallets and good for America.