Cheap Oil to the Rescue, Economist Predicts
From Market Watch
By Al Lewis
Economist Robert Z. Aliber didn’t hedge his prediction on what a barrel of oil will cost one year from today. “It will be at $56.65,” he declared, down sharply from its current level of about $90.
Aliber is a professor emeritus from the University of Chicago. He once worked beside Milton Friedman, and he authors and edits books, including the well-known tome, “Manias, Panics, and Crashes: A History of Financial Crises.”
Each year, he comes to Colorado to deliver his annual forecast to University of Chicago alumni who’ve managed to escape the flatlands surrounding the Windy City to settle near the ski slopes. Unimaginably cheap oil, he predicts, will finally kick the U.S. economic recovery into high gear.
“We’re in for a massive price decline,” he told his audience. “It will be like a tax cut for all of us.”
Families will have more disposable income, businesses will have much lower operating expenses, and trillions of dollars now tied up in gas tanks will flow into the broader world economy.
High oil prices are a huge contributor to our global economic malaise. Oil importing countries — including the U.S. — are running enormous trade deficits with oil exporting countries, from Norway and Russia to nations of the Middle East.
