$200 oil isn't as crazy as it sounds | Hacker News Reader

$200 oil isn't as crazy as it sounds

cnn.com

18 pointsdabinat13 comments

> If oil reaches $200, it would damage the global economy.

What supports $200 oil, then?

The 5 trillionaires that will still be able to afford it.

The 5 trillionaires can also afford $10,000 oil. Why would they pay $200 when they could pay $150?

Everything? Price of oil is tied to the price of every single thing you buy. Unless you go off grid and grow your own food you are supporting the price of oil.

Exactly. If you keep buying those things then the world economy will remain strong. Economies are damaged only when people stop buying things. So, again, if the world economy is damaged what supports $200 oil?

> So, again, if the world economy is damaged what supports $200 oil?

Good'ol money printing.

> If you keep buying those things then the world economy will remain strong. Economies are damaged only when people stop buying things.

Boring stuff like stagflation takes care of that.

> Good'ol money printing.

Okay, so not really $200, except maybe nominally which doesn't mean much today. Per the discussion, what supports $200 oil in real dollars?

> Okay, so not really $200, except maybe nominally which doesn't mean much today.

Well, it is real $200 - nobody said price inflation would lead to wage inflation, and it wouldn't.

> what supports $200 oil in real dollars

The only real "real" is the standard of living - when it drops with inflation, comparisons to yesteryear's melted snow don't really matter.

> Well, it is real $200

Okay, but then what supports the nominal $300 or whatever value it is after inflation has also been accounted for? We haven't even figured out how a nominal $200 is supported and now you're talking even larger nominal numbers, given the assumption of inflation.

> The only real "real" is the standard of living

Maybe as an individual, but that has little relevance to a macro discussion.

For every 6 months the strait of Hormuz remains closed the price of oil will double. This will become insane and untenable somewhere around 1.75 cycles

seeing the source url, I feel this can largely be dismissed as a billionaire class owned publication steering the public discourse

So you're saying it's a news outlet?

you certainly have a point, though there are organizations with more journalistic integrity and freedom and a different ownership structure. But maybe not in the US any more.

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