Is the high price of oil the reason our economy is in a recession?

President Bush said during an interview that the reason food prices are sky-rocketing is due to the fact that a barrell of oil is $126. How do food prices appertain to oil prices and why does the economy revolve around oil?Is the high price of oil the reason our economy is in a recession?
Yes, but the sub-prime mortgage mess is more to blame. Basically, a lot of banks thought it would be a good idea to give mortgages to ppl who can't afford them with higher interest rates (apparently made money...go figure) and to a big surprise, these people couldn't pay them! Now houses are being foreclosed left and right and their values are dropping.





As for how food prices are related to oil, it costs oil to transport them. It also takes oil to grow them (it's in a lot of fertilizers) Not to mention that we're using a bunch of it for biofuel production.





Also, I have to say, oil prices are only going to get higher. Oil will run out eventually, and our economy is based on supply and demand. As in, supply will become smaller as demand rises, causing prices to go up.





Yay! With global warming, running out of gas, and ignorance we are screwed in 50 years! Yay! Hoorah! *cries quietly*Is the high price of oil the reason our economy is in a recession?
Yes, it most certainly is. Our present economy runs on oil.





Our economy is based on movement: on people being able to get to work, to the store and on food and other goods being transported to the store for distribution. Oil allows this movement, as it provides fuel for the vehicles that make such movement possible.





As the price of oil increases, the price of transporting goods to retail outlets also increases. Companies need to make money to pay their employees and keep their businesses running, so prices must be raised to cover the transportation costs. As a result, no one is left unaffected by the rise in oil prices.
it's mostly uncertain and speculation that's causing the recession.





the main reason why the fed is cutting rate, because it wants people to borrow again. it wants business to borrow, and mainly construction companies. because it creates a ripple effect throughout the economy.





Construction Workers build houses, the houses need sink, tubs, electricity, mirror, tile, doors, windows, mortage, bank, it's like a trickle down effect.
The reason food prices are sky-rocketing is because it takes oil to deliver the food, by air, plane, boat, truck, ect.





The reason we are in a recession is because of the Billions of dollars a week it costs us to be overseas right now, and the billions of dollars it cost during the ';official'; war...





Not to mention inflation and the decline in the value of the dollar..
The farmer in Iowa grows corn, using a small amout of gas to power his tractor and various other things on the farm. Then the corn is picked, loaded on a truck, and shipped to whatever supermarket it's going to. All of those things cost money...and when gas goes up, the price of the corn goes up because it cost more to get it to you.





I blame gas prices for the recession...but not entirely. Recession is a natural thing that happens in the economy....what goes up must come down...and will inevitably go back up.
oil is high because they want us to see that theres a problem, and that we have to do something about it soon. there's only about 30-40 years left until the oil runs out in the Middle East. the whole world runs on oil; cars, cities, heating homes,ect.


when oil comes to a small amount, the world's countries are going to use military use to get the rest of the oil for thier selves. when the oil runs out, the world will poss for years until a good back up source is made. scientists have not come up with a good back up source yet and are saying we should have started it 30 years ago. the world's oil is running out, and humanity does not have a back up plan.


oil is a huge source that effects every thing, including food.
The cost of your food, shelter and energy has doubled in six years. The wages have been pretty flat in the same amount of time. just look at the amount of foreclosures, bankruptcies and the reduced savings rate you will find the evidence of economic recession.


When fuel was 25 bucks a tank it has just gone up to 55 in 2 years not 6 or 7. Compare it to the cost of a gallon of milk.
'customized' is right... check this out...





This was from today in fact and should help to answer this question...








AIADA (American International Automobile Dealers Association)


May 14, 2008





AIADA's FirstUp: The (Real) Reason Behind High Oil Prices





The (Real) Reason Behind High Oil Prices


On May 13, the price of a barrel of oil briefly hit a record of $126.98 on the New York Mercantile Exchange. The reason was ostensibly that Iran was cutting oil production. But there is no gas shortage. In fact, in the U.S., stockpiles of oil climbed by 11.9 million barrels in April; they were up by nearly 33 million barrels since Jan. 1. At the same time, MasterCard's May 7 gasoline report showed that gas demand has fallen by 5.8%. So why are prices still going up? Ed Wallace, writing in BusinessWeek, says prices are rising due to an unregulated commodities markets and greed. Commodities have often been the refuge for investors who have lost money on equities or fixed-income investments. If not restrained, they can drive up the price of goods that we can't get out of buying. In the press we are bombarded daily with justifications for the high price of oil, such as strife in the Nigerian oil patch. However, the Senate took a dim view of those excuses, saying that manipulative hedge fund managers are ';making bold predictions of shocking price advancements to come'; and adding ';more fuel to the bullish fire in a sort of self-fulfilling prophecy.';
Oil is a key product in many industries and is used as gasoline, kerosene, and a huge variety of different operations....as for food prices i'm not too sure, good Q, I think it has to do with the fact that oil is so important and affects everything else, including food. We export a lot of food....hmmm you know I wish I knew.
it depends where the food is coming from. it could be coming from iran, where most of the country gets the oil for our vecals. and sometimes, people just need a reason for prices to go up. for example: o the sky is clear, time to raise gas prices!


and sometimes people are just wanting to collect extra money. they are like invisible pick pocketers


:-P
That and the relentless collapse of the infrastructure from neglect.





Greed has indeed been the motivator. To keep a machine running you have to service it and not over drive it. But the people who run our country would rather run a polluting factory than stop for the expense of fixing it. Eventually the machine breaks. Because the guy profiting just couldn't stand to lose a penny.
There are not yet hard numbers that show that we're in a recession. Food prices are rising in part because the government is paying farmers to grow corn for ethanol which is diverting land %26amp; resources away from other crops reducing the supply thereby increasing the price.
No one truly knows for sure what causes recessions. They happen in patterns. Usually a war happens right before or during a recession. In all honesty, we have been going down hill for quite a while...it's just taken the ';war on terror'; to finally see it.
Everything is in a very delicate balance in our economy...as far as the gas prices go, I think we were entering a recession before they started to skyrocket, but that is making our economy all the more worse...
It takes oil to grow food and to transport it to the supermarket. You can get fresh fruits and vegetables year round because some of them are flown in from the southern hemisphere.
food prices are higher becuase the trucks that deliver the food to the stores spend more money on gas. therefor they must charge more on their products to get their moneys worth
the food wouldnt make it to the store without being trucked there and truckers are paying big money to fill the tank on the truck
The Housing Crisis started it, the oil crisis is only adding to it.
He right about that, but he need to do more than just talk. Because he veteo all the bill that could had help our economy.
because oil powers most things, you would need oil for driving..


but i heard that food prices are rocketing because some foods require a certain type of soil to grow... hope that helps :)
thats not the only reason but thats most of it why are we paying for murders and idiots to live in jail there is no reason for that
Greed is the reason.





Oil prices show this.
yes