Colombo, how can China’s oil demands keep growing if their economy stalls? They are just wanting oil to be like us, but are not fully dependent yet on oil as we are.
But in the US, how much can our demand be reduced? What is the biggest use of gas in this country? Isn’t it gasoline for motor vehicles? In a recession, I guess truckers and the unemployed make fewer trips,but for the most part people will still drive to work, heat and cool their homes, and farmers will keep buying fertilizer and running their tractors. How much did oil demand decline in the last recession, or during the last oil price spike? Was it 10%? My question is whether price spikes in oil or a recession will dampen demand enough to cause a price reduction.
leung_lewis, what significance is a chart showing gold/oil? Historically, gold is correlated with inflation, and NOT correlated with the dollar. Is it correlated with oil? I just don’t know why they made that chart.
Thanks for the link to Jubak’s article on China. I look forward to reading his Friday follow-up. It sounds like oversupply and overinvestment is their biggest problem. Then there’s the bad bank loans, housing bubble, government corruption, artificial pegging of their currency. The gov’t enacted tax laws to dampen housing speculation, so an art bubble had replaced the housing bubble.
