Oil Produces Unsettling Times

Seattlepi.com – All this is uncomfortably reminiscent of the oil shocks of the 1970s, when the acronym OPEC — the Organization of the Petroleum Exporting Countries — entered popular language. It exerted its power by agreeing to quotas for oil production, leading to a quadrupling of the oil price and two global recessions within seven years.

After the most uncomfortable decade, in economic terms at least, since World War II, the world recovered. Other sources of oil, including the North Sea, were developed. Tough monetary policies squeezed down inflation. The oil price fell back, growth was resumed, inflation fell and the foundations for the long boom that we are still enjoying were established. That experience should remain a warning, but historical parallels are rarely exact. Our situation now is in some ways more hopeful and in some ways more disturbing.
Seattlepi.com