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Falling
Prices Signal Tougher Times Ahead?
by Efrem
Graham
June 16, 2012
The pain at
the pump has eased up in the last few months, with gas prices falling
sharply -
just one of many commodities seeing a drop in cost.
But those
cheaper prices may be a sign that even tougher economic times are on
the
horizon.
Relief at
the Pump
Americans
have undoubtedly noticed gas prices have fallen markedly in the last
few months
to a national average of about $3.53 a gallon.
“Big
difference. It doesn’t take as much money to fill your vehicles up,”
one
consumer said.
Gas has
even dropped to less than $3 a gallon in parts of South Carolina.
“I am glad
to see it under three dollars. Yay, we did it,” one South Carolina
resident said.
One
resident remarked, “It’s great it’s dropping under $3, but it’s still a
long
way from where it needs to be.”
Gas prices
are falling with the plummeting price of oil, which now hovers just
below $83 a
barrel, about a 22 percent drop in crude prices from early last month.
The
situation is raising concerns about what the Organization of the
Petroleum
Exporting Countries, or OPEC, will do as they begin meetings today.
“We have
over 70 customers worldwide, so we respond to their demands,” Saudi oil
minister Ali al-Naimi said.
Oil is not
the only commodity seeing a dip in price. Gold is down too, along with
key
agricultural products like corn, wheat, sugar, coffee, and dairy. A
United
Nations index shows global prices for those food ingredients are down
14
percent since February.
Global
Economy Weakening?
But
financial experts warn those falling prices are also signs the world
economy is
getting weaker and may be heading for a recession.
That may be
enough to keep OPEC from reducing oil production, which would push
those gas
prices back up and hurt the global economy.
“Any relief
at the gas pump for Americans that at least have jobs, it’s good news,”
Patrick
Dehaan of Gasbuddy.com said.
Cheaper
commodities don’t always translate into cheaper grocery prices. But
this time
around, MarketWatch reports that last month the price of fresh fruit
fell 7
percent, and meat declined more than 2 percent.
Source:
CBNnews (cbn.com)
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article and see the video at Mail Magazine 24
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