Monday, 28 Feb 2011 09:09 AM
Moneynews.com
By Sean Hyman
There are many events all at once that aren’t good for the risk appetite of investors around the globe.
For instance, oil is hitting triple digits again as it hangs out around the $100-a-barrel level. So oil prices have literally tripled since December of 2008. That’s eventually going to take a toll on the global GDP numbers and weigh down global growth like ankle weights on a runner if those high prices continue.
Then there’s the uprising that we’ve seen in Tunisia and Egypt that caused their presidents (aka dictators) to fall from power. But then the protests started spreading as fast as a cancer all over the Middle East.
Before long, protests were happening in Bahrain, Iraq, Oman, etc. If these uprisings spread to Saudi Arabia, where the lion’s share of the world’s oil is found, then oil could jump to $150 to $200 a barrel with no problem. Gasoline prices could go to $4 to $5 a gallon.
This would sap consumer spending as more of the average consumer’s paycheck had to go into their gas tanks, which would leave fewer dollars to be spent in the retail market place. As retail sales slumped, it would also weigh down consumer sentiment at the same time.
So this thing could get really ugly if these protests really gear up in Saudi Arabia. Keep an eye out for that.
For instance, oil is hitting triple digits again as it hangs out around the $100-a-barrel level. So oil prices have literally tripled since December of 2008. That’s eventually going to take a toll on the global GDP numbers and weigh down global growth like ankle weights on a runner if those high prices continue.
Then there’s the uprising that we’ve seen in Tunisia and Egypt that caused their presidents (aka dictators) to fall from power. But then the protests started spreading as fast as a cancer all over the Middle East.
Before long, protests were happening in Bahrain, Iraq, Oman, etc. If these uprisings spread to Saudi Arabia, where the lion’s share of the world’s oil is found, then oil could jump to $150 to $200 a barrel with no problem. Gasoline prices could go to $4 to $5 a gallon.
This would sap consumer spending as more of the average consumer’s paycheck had to go into their gas tanks, which would leave fewer dollars to be spent in the retail market place. As retail sales slumped, it would also weigh down consumer sentiment at the same time.
So this thing could get really ugly if these protests really gear up in Saudi Arabia. Keep an eye out for that.
Read more: ‘Perfect Storm' to Sap Risk Appetite for Aussie Dollar
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