Friday, June 22, 2012

Expect the Economy to Begin to Improve by November

Back in April, when diesel fuel was rapidly approaching $4.50 per gallon, I wrote an article predicting the recent downturn in our economy.

Today oil fell below $80.00 per barrel and diesel fuel is now well below $4.00 in most places.

Given my economic theory of diesel, there is an approximate three month lag between the price of fuel and its effect on manufacturers and shippers. That being said, the economy should hit bottom about the first of September. Manufacturing and hiring should begin to pick up again then.

Mitt Romney has pledged to authorize the Keystone XL pipeline as well as open up production of oil and gas leases already issued. By the economic theory of diesel, policies which would sustain lower fuel prices would do more to improve our national financial situation than anything else. If we continue the current policies which cause the current porpoising of oil prices, our economy will continue to stutter.

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