hr: Money

There are three major factors that we can blame for the week economy, but top among these is the escalating crude prices, which have increased by about two-thirds in just the past year, after essentially doubling during the prior few years. They relate to everything from a weak U.S. dollar, to steadily increasing global demand, on to concerns about output declining in a variety of producing venues across the world.

Escalating crude prices eventually lead to both higher gasoline charges and increased levies for a range of products manufactured from hydrocarbons and for the transportation that inevitably links producers to consumer for all products and many services. And when we substitute synthetic fuel made from corn for a portion of our oil-based gasoline, the food chain similarly receives an inflationary jolt.

Experts believe that we’ll be paying $200 a barrel by 2010, our economy and the markets collectively will be gravely affected. But perhaps the most amazing element of this set of circumstances is that they’re occurring almost without any meaningful US national energy policy.

The next in line to take the blame is housing. The resetting of adjustable rate mortgages that can trigger foreclosures has yet to reach its peak. With as many as a million bank-owned houses likely to hit the market this year, we see a bloated inventory of new and pre-owned homes for sale.

The third but not least is general inflation. The inflationary trends were precipitated by increasing fuel and food costs. Whichever came first, the egg or the chicken is hard to figure out, but all of these factors: the rise in crude prices, bloated housing inventory and inflation, all contributed to our sagging economy.