Will Lower oil & Raw Materials lead to rapid growth in world economy and stock markets
It looks like there will be fall in prices of oil & some raw materials in the near future. I think if oil and other raw materials come down to a reasonable value there will be rapid growth in world economy. It will help to reduce inflation. Co operations will benefit as a result of lower transportation and production cost. There will be more production and demand for products and services. Finally companies will make good profits and we will see another record bull market in the stock markets through out the world. Also we will get opportunity to invest in production sector as well. Do you think so?
Answers
116 points
GigaBill answered 11 months ago …
I think investment in the production sector is wise. Very wise. My caution to you would be that a look at the geo-political climate where the juniors are exploring can be very scary.
Exploration in areas recently auctioned, offshore of some volatile areas of Africa, is very troublesome to me as investor. I look at history and see very capricious treatment of "exploration/production rights" by what passes for governments in these parts of the world. The Brits and French have been taken advantage of in this part of the world in the past. Nothing suggests that it will be different now.
I do not forsee great upshot of processing/refining taking place near enough to production to make the difference you might expect. Therefore, I still see a good value in the transport aspect of any increased production. Tankers tankers tankers!
GigaBill
acolyte of Gumshoe
1130 points
sundarkambam answered 11 months ago …
See the study by IMF "The Impact of Higher Oil Prices on the Global Economy".
It throws very useful insights which can hold true in the reverse case when Oil prices fall.
Link :
http://www.imf.org/external/pubs/ft/oil/2000/
2547 points
Oldman answered 11 months ago …
I finally Jan.24th) found a reasonable answer to your repeated enquiries concerning palm oil and rubber in a posting at http://www.SeekingAlpha.com
, by a Mr. Dion, who has an ETF trading review/newsletter (which I don't necessarily recommend) ...but he discusses the I-Shares ETF EWM (Malaysia) and indicates the company holdings that deal in palm oil and rubber. The Article's number is #61378...the posting's title is: Palm Oil & Rubber Keep I-Shares Malaysia... This is in reply to frequent questions about these two commodities by MNSL, and about which I have very little direct info.
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