Phil Flynn: You Don’t Believe We Are On The Eve Of Demand Destruction

Tell me over and over and over again my friend! You don’t belive we are on the eve of demand destruction! The last time I honored the 1965 Barry Maguire classic “Eve of Destruction”, oil was hurling towards $147 a barrel and I said that there is no way that this rapid rise would not cause demand destruction and damage to the economy. What followed was the biggest drop in demand in the history of the global oil markets. Now with concerns of another slowdown in the economy, is it possible that demand could crash again?

Ok it is not only the Fed worried about a slowdown in the economy, it seems that the International Energy Agency is as well. The Fed helped bail out oil bulls to a certain extent when they said they would reinvest principal payments on mortgage assets the central bank holds into U.S. treasuries in an effort to keep historically low borrowing rates historically low. I know it sounds ironic. The Fed is concerned that growth has slowed in recent months and fears that "the pace of economic recovery is likely to be more modest in the near term than had been anticipated.....Read the entire article.



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