I don’t know why the price of oil went up so much. It really went up very high. At the time, many said it was being manipulated upward. By speculators engaging in practices to push it up. I don’t think that is likely, markets don’t usually behave that way. It is quite curious though. Lot of conspiracy theorist would probably say we have oil men in the white house, that’s why it went up. Maybe there’s something to that. As squeaky clean as Jimmy Carter was, when he left office there was a peanut shortage and he was a peanut farmer!

I think the price of oil is probably undervalued now. I’d like to see it drop more but it really doesn’t seem to make a lot of sense that it would. Demand for it hasn’t become slower. Since the price has fallen, some production will likely stop as the cost to get it out of the ground is too high. Those high prices stimulate more exploration and give us access to oil that would otherwise be too costly to obtain.

I’ve not done much research on that or even thought about it. I’ll try to do that. why has the price of oil fallen. Good question. Has demand really fallen enough to justify this? Wouldn’t seem like it.

Losses in high risk derivatives caused Lehman Brothers to fail and AIG to get into trouble. That lead to a panic but the problem was there before hand. A month before that the Fed quadrupled the amount of money that could be lent out for each dollar held by a bank. That is when my red flags went waving.

When the lending stopped, the growth went negative. It is impossible to sustain that kind of growth when business can’t borrow money. When businesses can’t borrow, they can’t expand and they may not be able to continue operating. They need short term loans sometimes to make payroll. Very profitable businesses can have cash flow businesses and they need banks to get them through that.

from quite a number of website that i’ve been to, food crisis was mentioned quite a few times. do you think this can be another cause for this negative economic growth?

and from one of your reader, aldee, has mentioned about the increase in the oil price. i was rather curious why did the price skyrocket so much in the first place? was it just purely because of the falling dollars? or maybe the increase in demand for the use of it by the developing countries like China and India?

Everything in the economy played a part in it. Gasoline at $4.50 a a gallon would cause a huge recession in my budget.

But no, it is not a major reason for the economic crises of 2008. The price of gas is about 1/3 what it was in October. If that was the cause, the crises would be over. Gas prices will go back up to those prices once consumers start spending again. Had gas prices stayed at those prices, it would make things harder for people of course.

Since there is no lending there is no money for growth. There is no lending because of the losses in the housing sector.

then what do you think about the food crisis and the increases in the oil price that lead to financial crisis in 2008?

aren’t these two factors also another two important factors for the causes of the financial crisis?

I’m sure you’re more in tune with things than I am and would love to have your input.

You’re a rarity, a female expat.

Awww love, yea that will mess up your life. LOL Deported, oh my. I’ve imported a wife once myself (never put it that way before lol) and she was from Canada so that was pretty easy except for the paper work which was a freaking night mare. The IRS doesn’t have anything on the INS!

Glad you were able to reconnect with your guy. He doesn’t treat you right and I’ll beat him with a bat!

I wish I had always worked for myself. I strongly recommend you get something going on the web. I know retirement seems like it will never come but trust me it comes fast!

Are you bilingual? You working in Mexico and being bilingual bids well for you. That has to look great on your on your resume!

Money doesn’t really matter very mmuch but the lack of it sure does.

Maybe we could do something online together if it wouldn’t cause you a conflict of interest or other issues. I’ve been thinking of doing a finance\economics website at some point.

I’m an accountant but boy have I forgot all the FASB and GAS as I worked in income tax only then as a computer annalist. I am strictly a hobbyist in this field. But I do my research.

When I was in school we didn’t have derivatives and bundled securities, if we did, I certainly didn’t know about it.

Some think we have hit bottom and are now on the way back up. Perhaps the worst is over in the banking industry. It is hard to say.

It would seem there are more hard times to come, even for banks, because now that the housing bubble has popped, the ramifications of that are yet to actually hit.

The numbers the government is throwing at the problem though had better work. They are larger than nearly all the other public works throughout the 1900’s combined!

As you know, a deficit in government spending is not a bad thing but what we have looks like it will approach 10% of GNP and it hasn’t been that high since 1945.

Yea, have fun in Mexico! Be careful!

I am also concerned about Mexico’s economy. I’m afraid it is going to tank with the US and inflation is going to hit us hard, but mostly I think that because everything seems to be going in a constantly downward spiral (or is it upward? $$$). I’m afraid all these bail-outs will cost the US more than what’s imagined. Mexico bought bad loans in the banking crisis of the early ninety’s and supposedly their ”bail-out”, which the Mexican government hoped to make money off of, ended up costing them 3 times more.

When will we hit bottom?

But all these bail outs, sooner or later will destroy the dollar if they become too heavy. Right now the number is at about 7 trillion dollars. This is a staggering number. I’m seeing that this number is higher than Vietnam War, The Race To The Moon, The Iraq war, the Korean war, The New Deal, and others COMBINED is about 3.5 trillion.

Hopefully all these companies will pay the government back but all this new money that we are crating by these new loans is eventually going to lead to inflation unless we get production up.

We are headed toward a deficit equal to 10% of the GNP and the last time we had that was in 1945. At the end of WWII.