Saturday, March 03, 2012

Oil Going to $200 a Barrel? Then to $1,000 a Barrel?

...the team at Bank of America Merrill Lynch believes that, independent of what's happening in Iran and elsewhere in the Middle East and North Africa, additional money printing would result in multiple oil price spikes to $200 a barrel over the next five years.

Other prices would rise, too. But oil is what's on everyone's mind right now.

Over the short term, the analysts estimate a QE3 would quickly add more than $12 to the price of a barrel of the black stuff -- sending gas prices toward $5 a gallon.

Rising oil prices have already put us in the danger zone. All but one recession since World War II has been preceded by an energy price spike (1960 was the exception). And the global economy is already spending more than 8% of its economic output on energy, a peak level last seen during the 2007-2008 commodities bubble, and before that, during the energy inflation nightmare of the 1970s and 1980s.

If QE3 happens, it could push the global energy "tax" on the economy into uncharted territory. _Will Fed Push Oil to $200 a Barrel?
The author above is concerned that a third quantitative easing (QE3) by the US Federal Reserve Bank would be the straw that broke the economic camel's back. Read the article to learn why he feels Ben Bernanke will risk unleashing economic chaos in global markets such as the oil market, just to help his boss, Mr. Obama, get re-elected.

Other analysts think that oil could shoot much higher -- up to $1,000 a barrel and above!
The fact of the matter is, currency devaluation makes people poorer. If a currency declines in value by 50%, and your wages do not rise by a corresponding 100%, then you are obviously getting paid less. However, it is usually not so apparent at first that this is the case. The way in which we get poorer is by rising prices such as those for gasoline, and a broad economic deterioration which is quite difficult to put your finger on exactly...People as a whole know that they are being slowly devalued into poverty by the Federal Reserve’s “easy money” policy. However, this topic is much too complex for most individuals, so they focus on something – gas prices – which seems more direct.

Before this is all over, I expect to see oil prices north of $1000 per barrel – perhaps in 5-8 years.... _Oil Continues to Rise Because Dollar Continues to Fall
It is not likely that US President Obama is concerned about the long term fallout of the fiduciary and monetary excesses of his current regime. In fact, in many circles Obama is becoming known as the anti-growth president, the anti-energy president, the anti-private sector president, and even the anti-American president.

Whatever the moniker, it is clear that Mr. Obama and his happy minions are playing with fire across the economic, industrial, and energy war-fronts. It is probably a good thing that Obama does not actually care about the long term impact of his policies, because he clearly does not have the personal heft to understand what that impact will be.

Labels: ,


Blogger thor said...

Care to track this prediction over time?

Lots of people make predictions. They're never tracked. Forgotten. Then the same guys make another prediction and we're supposed to be all worried all over again, oblivious to the fact of all their failed predictions in the past.

3:41 PM  
Blogger Whirlwind22 said...

This will probably result in the collapse of society at $1000 per barrel.

5:50 PM  
Blogger al fin said...

Oil is unlikely to go to $1000 a barrel unless the dollar's value shrinks precipitously.

In that case, the cost of oil will not be the only problem for dollar based societies and other societies which depend upon them.

But don't confuse cause and effect. If government's debasing of the dollar leads to high prices for commodities in dollars, the real price in gold and sounder currencies will not fluctuate to the same degree.

9:38 AM  

Post a Comment

Subscribe to Post Comments [Atom]

<< Home

Newer Posts Older Posts