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Calgary - Recession Hedge Thesis Discussion
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Was hoping to figure out whether the following thesis is supportable:
Trying to make the case that in the short term economies that are quite dependent upon the oil and gas industry such as Calgary serve to act as a natural hedge against the impacts resulting from a localized (north america) recession. If a recession occurs, led by increasing oil prices, then in the short term (lag effect) the economy of calgary would continue to achieve better economic results then that of economies who are less (or not at all) driven by the o&g industry.
However, even in an environment where a recession is not caused by increasing commodities prices, economies that are reliant upon the o&g industry should be less impacted in the short term by a recession, in large part due to the increasing demand for oil by countries (china, india, etc) who are becoming less reliant upon north america for their success.
In summary, my thesis is that in the short term, as long as a global recession does not ensue that results in a worldwide economic slowdown, cities such as calgary should be less effected by a north american recession then that of other cities located throughout North America.
Does this argument hold any merit?
(This post was edited by econmod on Apr 25, 2007, 1:51 AM)
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Bsed
New User
Apr 21, 2007, 9:52 PM
Post #1 of 2
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