Last week was a replay of weeks following the September 15th, 2008 Lehmann Brothers bankruptcy and the global credit crisis that triggered mass lay-offs and plummeting oil prices in America, Europe, and Asia. Deflation is stalking this land and the world.
In its worst week since October 2008, the Dow lost 6.4% and gold even fell 10% or $101.90, another indicator that the global economic risk is deflation and not inflation.
Oil fell 9%, reaching $79.85 at the West Texas Benchmark, and falling from $113 in April. Remember in 2008 oil plummeted from $147 per barrel in July 2008 to $33 in December when the oil markets signaled a depression was around the corner.
Representative Bachmann promised if elected President she would restore $2 per gallon gasoline, noting that in January 2009 gasoline cost less than $2, and blaming President Obama for $4 gasoline. A good dose of global depression fears already has pushed gasoline below $3 in some parts of America, according to Jonathan Fahey of the AP, so Bachmann may keep her promise whether she wins the Presidency or not.
The AP further reported that the national average for gasoline was now $3.51, down from $3.98 in May.
What is triggering the massive decline in oil prices? Is it surging demand? No, it is falling demand, with real fear that Austerity Economics now being practiced in Europe and at the state and federal levels in America will throw the world into depression and deflation.
Falling into depression, of course, is the only way to create in the modern world sub $2 gasoline. And that is one more powerful reason why the USA must end importing oil.