Higher Oil Could Continue To Pressure The Stock Market (USO, SPY)

It is difficult to understate how explosive this crude oil situation could become. We are at levels in crude where every tick higher now causes serious concern with regard to the potential effects prices could have on the global economy. Some Wall Street analysts have come out saying that crude oil would have to rise significantly above $100 before it started to have an effect on the economy. Quite frankly, this analysis may be a little shallow. Does it take into effect already sky high food and clothing prices? How could they possibly take into account the psychological effects of $100+ crude on consumers? We currently have an environment where interest rates, food, clothing, and energy are all rising together. At some point if these trends persist, it is going to have a significant, adverse effect on the economy. Is it going to happen tomorrow? Maybe not, but anyone trying to downplay the longer-term effects of rising commodity prices is just being disingenuous.