I thought this summed up the situation with oil pretty well.
The Fed is in a pickle.
Have to raise rates to kill inflation, but can't raise rates because of $30 trillion in US debt and worries of blowing up the house of cards. GDP can't grow without oil, but the higher price of oil needed to grow production to meet demand will also cause inflation and kill the economy.
Food prices are about the explode too as high energy prices are causing fertilizer shortages which will have an impact on grain production this year.
It's going to be an interesting year...
Quote:There isn’t enough oil at prices that don’t blow up the economy to fund the level of GDP growth needed so that the debt doesn’t blow up the economy but if prices rise enough to get enough oil without blowing up the economy it will blow up the debt.
The Fed is in a pickle.
Have to raise rates to kill inflation, but can't raise rates because of $30 trillion in US debt and worries of blowing up the house of cards. GDP can't grow without oil, but the higher price of oil needed to grow production to meet demand will also cause inflation and kill the economy.
Food prices are about the explode too as high energy prices are causing fertilizer shortages which will have an impact on grain production this year.
It's going to be an interesting year...