Friday, November 7, 2008

$60 Oil Will Save Our Economy

Remember that $700 Billion dollar bailout? The one that was supposed to go to provide much-needed capital for major financial investment banks and institutions, but instead went to purchase banks, and will soon also be spent trying to pull the American auto companies off the Endangered Species List? We don't need it. Not with $60 per barrel oil. That money was supposed to be spent over the next year or two as institutions began to crumble under the weight of mortgage-backed securities and their even riskier counterparts credit default swaps. But what will happen if the mortgage default rate doesn't explode in 2009 as predicted? Nothing. No soup lines, no Great Depression part deux (oops, sorry, this is America , part dos), and no need for the socialism that soon-departing Treasury Secretary Paulson said we had to have or else we'll cease to be a free country.

It was high oil prices that sucked money out of mortgage and credit card payments, and now that money will start flowing back into mortgages and credit cards balances. With the economic outlook of China and India still being predicted as flat, then it means we have at least sub-$80 oil for at least a year.

So the question is where will President Obama spend the balance of the $700 billion left under the current Administration's mattress when they depart in January?

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