Jeff Gundlach: If Oil Drops To $40 The Geopolitical Consequences Could Be Terrifying [Transocean LTD, Seadrill Ltd, BP plc (ADR)]

After an initial transitory positive impact on GDP, Bridgewater explains that lower oil investment and production will lead to a drag on real growth of 0.5% of GDP.

The firm noted that over the past few years, oil production and investment have been adding about 0.5% to nominal GDP growth but that if oil

levels out at $75 per barrel, this would shift to something like -0.7% over the next year, creating a material hit to income growth of 1-1.5%.”

— Mike Lewitt, The Credit Strategist

Source: Bloomberg

This article is brought to you courtesy of Tyler Durden From Zero Hedge.

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