Yes JB & Daytr... I think if the demise of oil prices stay in the $20's for a long period of time it could be big enough to cause another Financial crisis...
The Argument is that Oil reserves are assets and valued into the business structure....the housing market bust crisis in 2007-2008 wiped out
over $7 trillion from the US Property Market and created the GFC .......Ok, the debt structure was dodgy which was the major factor (I highly recommend all investors should see the Film The Big Short)..but $7 trillion is a huge number.
The 2008 Financial Crisis cost the Americans $12,8 trillion*
* Mentally grasping large numbers...The height of a stack of 1,000,000,000,000 (one trillion) one dollar bills measures 67,866 miles. This would reach more than one fourth the way from the earth to the moon.
I get email from John Mauldin and his
recent newsletter made me realise why equity markets are so upset with super low Oil prices...
John's article starts off with someones screengrab from Twitter
http://ggc-mauldin-images.s3.amazona.../160206-02.jpg
Hmmmm...From doing the simple math...prolonged low oil prices doesn't sound like good scenario for the Global economy does it?