a rise in capacity there will be a rise in supply. Corresponding with this rise in supply there will be more money circulating there will be a rise in private domestic demand. If the production level falters a little bit it could cause an inflationary period in the United States. This is what the Federal Reserve is scared because at the current rate it will difficult for corporations to continue increasing production because workers will begin to ask for higher salaries and wages and corporations will not be willing to increase pay. In turn people will be fired or they will quit causing a downward spin. At this point although there is no evidence of this happing and the Federal Reserve is doing all it can to prevent this.Another important factor to predict the condition of our economy in April is the current situation of oil prices. Current oil prices have almost tripled since December 1998 when it was around $10 a barrel now the market cost of a barrel of oil is around $30. By April I am expecting to see prices around $20-25 a barrel. The reason why oil prices of risen so dramatically is because the OPEC has an agreement to control the quantity of oil extracted in fear of "global oil glut". The United States was debating the idea of selling its reserve supply in attempts to lower prices. Mr. Greenspan did not agree with this idea saying that it would be ridiculous to believe that the United States reserve supply could really have a significant long term impact on world supply. President Clinton is meeting with OPEC officials to discuss their options. One option President Clinton will rise is to rise production of oil not to level were price will return to $10 a barrel but to a level were prices will lower to a point were smaller economies will not collapse. Right now production levels are set at five million barrels a day the United States would like to see them increase that level to about seven million barrels a day. Th...
