Oil price decline may drive huge shift in wealth

[mahatmakanejeeves]

Oil price decline may drive huge shift in wealth

Economy
By Steven Mufson December 1 at 9:26 PM @StevenMufson

Tumbling oil prices are draining hundreds of billions of dollars from the coffers of oil-rich exporters and oil companies and injecting a much-needed boost for ailing economies in Europe and Japan — and for American consumers at the start of the peak shopping season.

The result could be one of the biggest transfers of wealth in history, potentially reshaping everything from talks over Iran’s nuclear program to the Federal Reserve’s policies to further rejuvenate the U.S. economy.

The price of oil has declined about 40 percent since its peak in mid-June and plunged last week after the Organization of the Petroleum Exporting Countries voted to continue to pump at the same rate. That continued a trend driven by a weak global economy and expanding U.S. domestic energy supplies.

The question facing investors, companies and policymakers is how low oil prices will go — and for how long. Every day, American motorists are saving $630 million on gasoline compared with what they paid at June prices, and they would get a $230 billion windfall if prices were to stay this low for a year. The vast majority of that will flow into the economy, with lower-income households living on tight budgets likely to use money not otherwise spent on gas to buy groceries, clothing and other staples.
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(The Washington Post)

[Fumesucker]

1. Used Hummer dealers seem to be doing well

Evidently some Americans are truly determined to give the Oil Barons their due.


http://www.pri.org/stories/2014-11-11/gas-guzzling-hummer-makes-comeback-fuel-prices-plunge

But while it might be nice to pay less than $60 for a tank of gas, some people are apparently thinking the price drop means it's a good time to pick up a Hummer.

General Motors actually doesn't make new Hummers anymore, explains Chico Harlan, who has been reporting on a recent spike in sales of SUVs and trucks for the Washington Post, so "we’re talking about used-car lot sales — but we’re talking about an 11 percent bump for Hummers."

And that's not the only vehicle aving a sudden resurgence: Lincoln Navigators had their best sales month on record, while Ford Explorers were at their highest level since 2004. SUVs across the board had a terrific month, Harlan says.

[Fred Sanders]

2. Net gain to American GDP is estimated at almost 1%, all gained by middle to lower class, if gas

prices stay at around $2.50 a gallon.

Energy production in America is less than 2% of GDP.

Lower oil prices are a boon to America, do not let mass media propaganda tell you anything else.