Wednesday, February 10, 2016

Worrying signs

Maybe this was understood by others before now, but until this morning I didn't understand why some seemed concerned about on going low oil prices for the global economy.

Someone on Radio National, who sounded as if he knew what he was talking about, said that it may be a short term good, but the problem is that banks have lent a huge amount of money to companies with  projects (mining, gas) which are not viable if oil prices stay so low.  Big defaults are possible, seemed to be the message.

I see now that Paul Krugman is sounding nervous about the bond market, too.  Not that I understand the bond market, but Krugman is generally sensible, and if he's thinks its a bad sign, I'll take his word for it.

Not that there is anything that I can do about it.

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