Long term of course, it is always a good thing. Contrary to what Central Bankers and the economist are telling us, it is always a good thing when consumer prices fall. Even Janet Yellen acknowledged the benefits of lower gas prices. Well, the same thing applies to all prices.
But here is the problem. If it turns out that we had a bubble in the energy sector, if the Federal Reserve really does raise interest rates, and I don`t really think they are going to, but if they do and the oil prices stays at these prices or goes lower, all of the activity in the oil sector for the last past several years turns out to have been a bubble and the layoffs that we are going to get in the short run and the credit losses and the Capex spending declines will be significant enough in the short run to push the U.S. Economy back into recession. I think it is a bigger impact than the bursting of the dot com bubble.
Related stocks: Exxon Mobil (XOM), Marathon oil (MRO), ConocoPhillips (COP), Chevron (CVX), Halliburton (HAL), Schlumberger (SLB)
Related exchange traded funds: Energy Select Sector SPDR ETF (XLE), United States Oil Fund LP ETF (USO)
Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.
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