The worst non-war time inflation in hundreds of years occurred in the decade after the U.S. left the gold standard in 1971 as the Federal Reserve was more biased to promoting growth than containing an oil-shock (sound familiar?).
It is concerned about the impact of the oil-price shock on the supply side of the economy.
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First, an oil-supply shock resulting from an Iranian crisis, say would send fuel prices sharply up again and wipe out profits.
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Concerns over the surging cost of Brent crude are growing as analysts warn that Europe could be at the center of an oil-price shock.
The boom has all the standard features of an oil-price shock, except that, compared with the more familiar cases of 1973-74 and 1979-80, and the not-so-noticed case of 1990-91, this one happened in reverse.
Lawrence Summers, America's treasury secretary, attracted attention recently when he likened the new-technology boom to a positive supply-side shock, the converse of the oil-price shocks of the 1970s.
Even those old enough to remember often confuse the two elements of the oil shock of 1973-74.
The potential threat to the economy may hinge on how well Americans have adapted in the wake of the oil shock of 2007-08.
Yardeni matter-of-factly compares the Y2K problem to the '73-'74 oil shock and he is currently predicting a 40% chance of a global recession because of this problem.
Even during the oil shock of the mid-1970s, world output continued to expand by almost 2% a year.
The oil shock has also exposed another long-standing vulnerability: Mexico's dependence on fickle foreign capital.
But it is certain, as opposed to merely likely, that the recent oil-price hike is a substantial negative supply shock.
With global demand for oil growing by 1-2% a year, there are persistent fears of a supply shock.
After the first oil shock in 1973 it didn't take long for Americans to return to their gas-guzzling ways, with a preference for large cars and big V8 engines, says automotive analyst John Wolkonowicz, of consultant Global Insight in Lexington, Mass.
From an economic perspective, the recent discoveries of abundant domestic shale oil and gas supplies may help us avoid the likelihood of an oil shock and buy us the breathing ground to plan for a more gradual transition to a more efficient post-fossil world.
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Add to this the work of Matthew Simmons, who in his 2005 book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, analyzed papers presented at Petroleum Engineering conferences, and concluded that the super-giant Ghawar field would soon enter a period of decline.
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