A Sure Way To Kill Economic Recovery

A monthly chart of crude oil is worthy of consideration given the news of economic recovery that continues to be preached from the pulpit by American government officials.

As one can see over the past twelve years, there was a rapid increase in oil prices from about 2000 to early 2008, and then a rapid collapse over a 7 month period.

With the onset of massive economic intervention by Central Banks and specifically the Federal Reserve, the price once more began a steady climb.

This time, after only a little over two years, the price stalled around the $112 to $115 level and then chopped around sideways for the past three years.

It appears to be moving to again test the 2011 high around $112 with Relative Strength readings waning.

For oil bulls, and the economy as a whole based on "the recovery" as government officials like to call it, the technical picture appears to be weakening longer term.

The next three to six months should tell us whether, we are indeed in a recovery, or a new recession.

In a fragile economic environment, one of the fastest ways to kill a recovery is a spike in oil prices as 2007-2008 shows.