How The Wave of Middle East Revolts Will Drive The US Into a Deep Economic Crises

While many people are cheering the revolts going on throughout the Middle East and shudder at the horrible violence few people are discussing the possible effect that these revolts will have on the world/US Economy.  Should these revolts continue to spike up the cost of oil, the world will be thrown into an economic crisis worse than the recession that began in 2007.

Certainly the crash of the sub-prime housing boom, which was caused by the progressive belief that owning a home was a right, is the primary reason behind the financial crisis and what was to become known as the  “great recession.”  The part that most people forget is that the “pin” that pricked the housing bubble, and led us down the economic abyss was oil prices.  In fact every rescission we have had since the mid-1970s has shown an accompanying spike in oil prices. It is not a coincidence that the worst recession in that period has been accompanied by the largest oil  price spike.

Economist Jeffrey Rubin said in 2008:

Curiously, an over-500% increase in the real price of oil gets virtually ignored as a culprit behind today’s economy, eclipsed by the ongoing crisis in financial markets. Yet the run-up in real oil prices this cycle is over twice the spike in oil prices that occurred during the first or second OPEC oil shock. And those oil shocks produced two of the deepest recessions in the entire post-war period, including the 1980-82 double dip.

The price of oil influences more than just how you heat your house or drive your car.

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