(WSJ Marketbeat Blog) Cheaper Gas Won’t Save the World

Crude’s down 28% since its February high. Corn’s down about 17%. Gold’s down 12%.

This slide in commodities, though, is a reaction to slowing economies, which makes for a curious leap of logic when one tries to argue that falling commodity prices will help boost those same economies.

“It makes little sense to expect a fall in the oil price to kick-start global growth if it is weak demand which pushed prices down in the first place,” Capital Economics economist Andrew Kenningham wrote. While cheaper gas prices do act as a transfer of income from oil producers ”“ think Exxon, Chevron, ConocoPhillips ”“ to consumers, it’s likely to have only a small effect on global GDP, “depending on the propensities to spend and save among producers and consumers.”

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, Energy, Natural Resources, Personal Finance, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--