zenfarm - 12/13/2014 10:02

What really scares me and is a lot bigger than supposed economic stimulis by lower oil prices is the very speed and extent of the oil price drop and the unintended consequences which may come as a result.


“The Economic Consequences of Global Oil Deflation”:

“Oil deflation may lead to widespread bankruptcies and defaults for various non-financial companies, which will in turn precipitate financial instability events in banks tied to those companies. The collapse of financial assets associated with oil could also have a further ‘chain effect’ on other forms of financial assets, thus spreading the financial instability to other credit markets.” (The Economic Consequences of Global Oil Deflation, Jack Rasmus, CounterPunch)