There’s an interesting piece in The Economist this week on the falling price of oil, which warns against cheering the news. Despite the obvious advantages for governments struggling to deal with inflation and relief for the world’s poorest consumers from the knock-on effects on food prices, falling prices mean bad news for global markets.
“[N]ot everything about a low oil price is a cause for cheer–nor is the dramatic volatility in the price a boon for consumers or producers. Most worrying is that the rapid recent decline is a symptom of a sharply worsening world economy: demand is dropping as economic activity stagnates, or slows, everywhere. More grim news about America’s economy sent the Dow Jones Industrial Average down by 7.7% on Monday with Japanese markets following suit.”
Read the full piece here.