The Next Energy Crisis
-- July 10, 2003
We've told you how the Fed's last ditch attempts at saving the economy by lowering interest rates are futile. But now we know why Fed Chairman Alan Greenspan is so desperate to try anything to stimulate the economy: There's another crisis brewing that could cripple the economy severely.
Chairman Greenspan, for the second time in less than a month, spoke to Congress about rising natural gas prices. His conclusion: There's no quick solution to stemming the rise, and natural gas prices will not start dropping any time soon.
Natural gas prices are projected to soar to more than $9 per million BTU by January 2004, according to Department of Energy estimates. Keep in mind that natural gas spot prices were a mere $2.64 per million BTU back in August 2002. That means natural gas prices could triple in just one and a half years! This is significant because many consumers and businesses made the switch to natural gas when prices were low. Now, they're getting caught.
Greenspan knows that skyrocketing energy costs don't lead to recoveries. He knows that they are a tax on households and businesses. A tax that makes the income boost from the government's tax cut otherwise hollow. And that's not good news for the economy OR the stock market.
related article: Natural Gas Costly, But What To Do?