Friday, September 15, 2006

What's missing from this chart?

Chart of the Day: Oil, Inflation Adjusted.

The greyed areas on this chart are recessions. Notice that when we had a large rise in oil prices in a short time (circa 1974, 1979, 1991, 2000), we generally encountered a recession shortly thereafter.

Will it be different this time? The rise this time came over 3 years, rather than in a short period, but this is also the second largest rise on the chart.

Also, one other thing to note: Most of these rises were followed by sharp breaks in oil prices as demand faltered.

Stay tuned..