Saturday, August 26, 2006

Oldies But Goodies

I went back and found two articles that have stuck with me over the years.

The first was the earliest very public warning of recession after the Y2K bubble popped. Re-reading this piece in light of the current price at the pump is sobering to say the least.

The economy's humming along, no more interest-rate hikes are in sight, and the markets are starting to feel comfortable again after the inflation scare... Why worry?

I'll tell you why. The fact is, throughout the last 50 years, there has never been a spike in oil-price inflation of this magnitude without a subsequent recession. That's right -- never. And a spike in oil-price inflation preceded almost every recession.
Call it the Oil Recession
Anirvan Banerji

On a brighter note, the second article is a stunning interview with Sheikh Ahmed Zaki Yamani, the former chief of OPEC credited with being the architect of the painful oil shocks of the 1970's. The good news: Sheikh Yamani predicts oil prices will crash; the bad news: he said that back in 2000.
OPEC has a very short memory. It will pay a heavy price for not acting in 1999 to control oil prices. Now it is too late.

The Stone Age came to an end not for a lack of stones and the oil age will end, but not for a lack of oil.
Yamani says OPEC accelerating end of the oil era
Reuters (via planetark)

By the way, I think they're both right... and if we get a really big spike in oil the Sheikh will look prophetic in the future.


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