Why Goldman's prediction matters

Last week, Goldman Sachs released a report saying oil could "super-spike" to $105 a barrel, which is $48 higher than Friday's closing price.(The report was for clients only, but the best coverage was from the FT.)

This is a scary notion, indeed. If oil were to get that high, every single economy could sink into a depression, and certain industries, mainly airlines and travel and hospitality, would grind to a complete standstill.

But it is even scarier because it comes from Goldman. When the economy slumps, which it certainly would at $105 a barrel, Goldman, the world's leading investment bank, would feel the effects. In a $105-a-barrel-economy, nobody would be going public and nobody would be merging, except maybe oil companies, which means Goldman would make no money. For this reason, Goldman has some credibility when making such a dire prediction.