Global imbalances hurt economic growth.

• Position: YOUR LIFE

The energy shock to economic growth will be felt worldwide through the increasing global imbalance between high investment and low consumer spending, according to an analysis by The Conference Board, New York, a global research and business membership organization. The steady rise of international commodity prices since 2002 has been led by spiraling oil costs, although there has been a number of additional factors motivating these increases, including exceptionally low interest and inflation rates, a surge in emerging market demand led by heavy investment in China, the acceleration of global manufacturing activity in 2004, and a shortfall in natural resource investment for almost 20 years.

"The relationship between U.S. crude oil stocks and oil prices has become unhinged during the past year, probably due to new demand-supply factors heavily influenced by China," maintains Gall D. rosier, executive vice president and chief economist of The Conference Board.

These imbalances have generated major crises in the past, both in the U.S. and abroad, although there are important offsets--particularly by deep discounting of other prices--today. Despite recent dips in energy prices, consumers across the...