PARIS (Reuters) – Costly crude oil, which recently neared $100 a barrel, may no longer be the certified economy killer the West dreaded in the 1970s, but it could still produce a nasty cocktail if mixed with the world’s other economic woes.
Many economists believe crude’s latest surge, which has fuelled renewed talk of inflation and stagnation, is still not enough on its own to derail the economy of the United States and others among the world’s richest countries.
But the latest leg in oil’s five-year climb coincides with a U.S. housing slump and a subprime mortgage defaults crisis that has hit bank profits, triggered a global credit crunch and proved no boom is never-ending. Food prices are also soaring.
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