Chicken and Egg: A Currency Called the Oil/Dollar? [View article]
It is hard for anyone to predict anything about spot oil in the short term due to the constant flux in the geopolitical landscape. However, long term, if and until alternative energy is a near reality, cheap oil at sub-100 prices cannot be sustained for two reasons. There have been no major discoveries in decades and many mature fields are approaching "peek oil" - moreover, as long as the oil bourse is tied to US $, the Dollar cannot sustain a rally as long the FED keeps printing billions of dollars a day to finance our trade and budget deficits exacerbated by a financial meltdown that is only half done. Beyond the psych games played by Bernanke and Paulson, no country has ever been able to print its way of a fiscal dilemma. Look for a huge breakdown on all fronts and stay short the market.
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Chicken and Egg: A Currency Called the Oil/Dollar? [View article]