A look at the History of the complex relationship between rising oil prices and global bear markets points to some surprising conclusions
When the oil price was below $25 three years ago, I predicted in this column a new secular trend in the market for oil, protecting prices in slumps and boosting them in booms. Then my suggestion was that this factor could also have significance for other raw materials and lead to a general bull market in resources shares all round the world. Now that oil prices are twice as high, the question is will it lead to a global bear market, as it acts as a tax on the developed world? The history lesson below leads to a surprising conclusion. Graph 1 (below) shows the relationship between share pr...
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