fuse-litAs the price of oil drops below $50 for the first time since 2009, noted investor Jeffrey Gundlach warns that a fall to $40 dollars a barrel could spark “terrifying” geopolitical consequences. The February contract for West Texas Intermediate briefly fell to a session low of $49.95 earlier today, while Brent crude also hit a 5-½-year low. However, according to influential investor Gundlach, founder of Doubleline Capital, a fall to $40 could set in motion devastating global developments.  “Oil is incredibly important right now,” Gundlach said in a recent interview with FuW. “If oil falls to around $40 a barrel then I think the yield on ten year treasury note is going to 1%. I hope it does not go to $40 because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be – to put it bluntly – terrifying.” As Zero Hedge points out, Gundlach is right to draw a correlation between unstable price fluctuations in crude oil and geopolitical turmoil.  “Large and rapid rises and falls in the price of crude oil have correlated oddly strongly with major geopolitical and economic crisis across the globe. Whether driven by problems for oil exporters or oil importers, the ‘difference this time’ is that, thanks to central bank largesse, money flows faster than ever and everything is more tightly coupled with that flow.” The last time we saw anything like this activity in terms of oil price, it turned out to be a precursor to the global financial collapse of 2008. More