suitanim
07-12-2012, 11:13 AM
Bear in mind, oil is sitting at just about $80 a barrel, and gas was $2.79 the last time oil was that low (2007).
Now oil is $80 a barrel and gas is at $3.40.
What happened? Why the difference?
We have had two bouts of Quantitative Easing, and both have resulted in a weakening dollar and an artificial inflation of prices. The promised growth has either been non-existent, or undetectable. Basically, printing money only REALLY helps those who touch that money first, and since the banks are the ones who touch the money first either through the Fed overpaying for their assets or lending to them on the cheap, this won't help anyone but them. Interestingly, back in '88, "Mr. QE" himself, Ben Bernanke said the practice doesn't work. But now he's about to initiate QE3. The last two times we did this, not only did banks end up with all the new money, FOREIGN banks ended up with the majority of that.
Anyway, look for gas prices to shoot up again (although what is REALLY happening is that our dollar just buys less) after this. Thanks, Obama. Thanks Bernanke.
http://finance.yahoo.com/blogs/breakout/crude-oil-prices-rocket-higher-qe3-says-trader-132423936.html?l=1
Against all the headwinds stands the prospect of QE3. Otherwise emboldened crude oil bears have learned not to bet against Ben Bernanke's Bazooka. Additional easing would almost certainly fail to drive growth and might not even be enough to weaken the dollar in light of the printing going on in the rest of the world. Traders don't care whether or not another round of stimulus would work because they know from past experience that Bernanke can drive prices higher, if only in the short term. Of quantitative easing, Craney says "that's the catalyst I think a lot of people are looking for at this point to move a lot of commodities, including crude to rocket higher."
Now oil is $80 a barrel and gas is at $3.40.
What happened? Why the difference?
We have had two bouts of Quantitative Easing, and both have resulted in a weakening dollar and an artificial inflation of prices. The promised growth has either been non-existent, or undetectable. Basically, printing money only REALLY helps those who touch that money first, and since the banks are the ones who touch the money first either through the Fed overpaying for their assets or lending to them on the cheap, this won't help anyone but them. Interestingly, back in '88, "Mr. QE" himself, Ben Bernanke said the practice doesn't work. But now he's about to initiate QE3. The last two times we did this, not only did banks end up with all the new money, FOREIGN banks ended up with the majority of that.
Anyway, look for gas prices to shoot up again (although what is REALLY happening is that our dollar just buys less) after this. Thanks, Obama. Thanks Bernanke.
http://finance.yahoo.com/blogs/breakout/crude-oil-prices-rocket-higher-qe3-says-trader-132423936.html?l=1
Against all the headwinds stands the prospect of QE3. Otherwise emboldened crude oil bears have learned not to bet against Ben Bernanke's Bazooka. Additional easing would almost certainly fail to drive growth and might not even be enough to weaken the dollar in light of the printing going on in the rest of the world. Traders don't care whether or not another round of stimulus would work because they know from past experience that Bernanke can drive prices higher, if only in the short term. Of quantitative easing, Craney says "that's the catalyst I think a lot of people are looking for at this point to move a lot of commodities, including crude to rocket higher."