This is just my guess, but I believe the collapsing world stock markets are directly related to dropping oil prices. Saudi Arabia has been pumping oil like crazy. There is a glut on the world market. They are doing this for two reasons. First, they want to break the Russian bank. It costs Russia much more to pump and process a barrel of crude than it does Saudi Arabia and Russia is much more dependent on that oil money. Further to the point, the Saudis can afford to sell at a loss. These things are intended to induce economic collapse in Russia and get them out of Syria. Syria is a Saudi enemy religiously and geopolitically. The Syrians are Shiites and the Saudis are Sunnis. The Saudis also want to run a petrol pipeline through Syria to Turkey and on to Europe. The cost of this petrol will be cheaper in Europe than the current cost of buying from the Russians. The whole thing is really a plot by the Saudi allies, Europe and the US, to bring down the Russians.
The second reason the Saudis are doing this is to shut down American oil production for a time. Like the Russians, it costs us much more to produce a barrel of crude than it does the Saudis. Places like the Bakken and Alaska will probably cease production soon. I believe this will be temporary. Once the Russian collapse takes place BRICS will collapse and the US will be firmly in control again.
Yes, I know...a conspiracy. It's a good one.
So how do oil prices effect stock prices. The US dollar is heavily dependent on the value of the petrodollar. The value of the petrodollar is plummeting right now and it is effecting the value of our currency. People are selling stocks that were overvalued to begin with for liquidity.
Once the current oil glut subsides and prices come back up again, so will the world stock markets. The pretenders to the US empire are being pummeled right now. A financial war is being waged. Let's hope it does not turn into a real and hot war.
My blog. My opinion. If you're an economist, tell me what's wrong with my theory.
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