"Before the rate cuts in September 2007, the oil price was at 75 dollars. As you know in the second half of 2007 and early 2008 the global demand for industrial commodities including oil was diminishing already. But the oil price still went up from 77 dollars to 147 dollars. The result of this increase in oil prices was that the total outlays for oil in the US, went from 500 billion annually to an annual rate of over 1 trillion dollars. The consumer was faced essentially with an additional tax of 500 billion USD and that probably pushed consumers over the edge in terms of consumption."
in FT.com
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
