The IMF once again shows how out of touch with everyday people they really are. $100 oil is not ok for the global economy; we saw it at $80 and even $60. If you go to some developing nations, you will find many cars that run on non oil based fuels. Why? They can’t afford to buy oil. And this is before oil hit $100, this was back when oil was at $80. So already a large portion of the world is priced out of the market. The US consumer can’t last another 5 years of such prices. When gas eats up $70 a week that adds up! That means less goes into the real economy the true engine that drives the global economy.
Too many analysts have forgotten what really makes the world go around. Oil doesn’t, oil is a piece of it, but when oil prices are out of alignment as it is now, the real engine starts to shut down. Consumers can’t consume because they don’t have money. And things that rely on oil get priced higher and higher. And unlike the developing nations, for some reason, the will to create real viable alternatives just doesn’t seem to be present in the US or Western Europe. Why? I really don’t know, how can small island nations transition to biofuel and natural gas to power cars and we can’t with all our technology, already have real working solutions on the road being used by everyday people; just like those developing nations have now? It’s shocking and shameful we as the technology leaders do not have working solutions and better engines on the road. We have the technology, I guess we just lack the will.
The IMF is just way out touch on this one, it’s going to spell trouble if they and Wall Street don’t put down the sparkling water and realize it is Main Street USA, Canada, Germany, Brazil, Kenya, Japan, etc… that is the driver of this world. It’s time we move away from oil, there are plenty of ideas out there to do this; we should be putting our money into those ideas. From a practical point of view, it only makes sense; the current system makes less and less sense everyday.