Economic expert Bert Dohmen told Newsmax TV
that the tumbling oil price is proof that the nation is in a deflationary crash and the future doesn't look promising.
"We are in a huge deflationary crash and that's the only way you can describe it, it's a crash and we should not make the mistake of thinking this is an oil problem and oil is causing this," Dohmen, president of Dohmen Capital Research Insist, Inc., told "Newsmax Prime."
After tumbling late last year, crude prices have slid another 28 percent this year. Oil and gas producers have begun revisiting their budgets to adjust to worsening market conditions. Iran's return to the oil market this month has added to worries, after the lifting of international sanctions.
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"The lower oil prices are an indication of the tremendous deflationary pressures around the world. It's not just oil. It's agriculture economy, it's all the other commodities, everything is a huge bear market," he said.
"All the analysts that I listen to out there that are on TV all the time, they say this is wonderful for the economy, wonderful for the consumer because it's lower gasoline prices, lower energy prices. They think that oil is the cause of something good," he said.
"Now you're seeing the emerging markets, the so-called brick countries that nobody thought would go down, etc. this is a systemic problem worldwide," he said.
Markets could “drown in oversupply,” sending prices even lower as oil demand growth slows and Iran boosts exports, the International Energy Agency said. A "lower-for-even-longer" scenario is forcing companies’ budget planners to trim spending even further.
Oil prices rebounded more than $1 a barrel from 12-year lows on Thursday, heading for their biggest daily gain this year as rallying financial markets gave some bearish traders reason to take profits on record short positions, Reuters
U.S. crude vaulted back to $30 as hopes for easier monetary policy from Europe fueled a recovery in European and U.S. stock markets.
Still, few traders expected a quick recovery from this year's 20 percent slump, with oil under pressure from a deepening supply glut and signs of economic weakness in China.
(Newsmax wire services contributed to this report).
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