THE HIGH PRICE OF CRUDE

It seems that it will be a matter of time before crude oil reaches $150 per barrel or more. Would this be so bad?

On the face of it, yes, as it would feed inflation exacerbating the cost of food and the price of everything, slowing down growth, causing some reserve banks to raise interest rates further crimping growth and potentially slowing down the world economy.

But would this be so bad? The high growth rates of some countries have in itself caused a whole raft of other problems such as the usage of more oil causing greenhouse gases and other negative effects to the environment. It seems that unchecked growth is unsustainable.

The rise in price of crude, while worrying (mainly to our own personal budgets), will check growth rates, reduce unsustainable consumption which in turn will have a "deflating" effect on the economy in the medium term. This will then self correct in a sense because if there is less growth and consumption, then there would be less demand for oil in the long run, which would then cause the price of oil to return to more reasonable levels.