fycyy
/ 86.45.142.* / 2009-11-12 12:50
Dollar trouble, oil's bubble could derail recovery
NEW YORK (Reuters) - The weakness in the U.S. dollar risks inflating a bubble in the oil market, which could threaten consumer spending and potentially cause a double dip recession.
"Many factors are the same as the summer of 2008," said Ethan Harris, head of global economics at Bank of America Merrill Lynch in New York. "What are the things that would derail the recovery? I think that an oil price bubble is near the top of the list."
Another drop in the dollar toward $1.60 per euro could help push oil back above the $100 level. That's enough to cause economic stress given the still-fragile state of global recovery, analysts say.
"If oil goes to $100 today, it will have the same effect on the global economy as what $147 oil had last year," said Nouriel Roubini, the economist noted for his early warning about the U.S. housing bust and global oil shock.
Oil at above $100 would be damaging to the United States, the No. 1 energy consumer, which remains hindered by a weak job market and subdued spending.