The results to last fortnight's Fun Online Poll are as follows:
Is Saudi Arabia deliberately pushing down the price of crude oil?
Definitely - 31%
Probably - 35%
Possibly - 16%
Unlikely - 13%
Other, please specify - 5%
Which is clear enough.
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Here's a chart from Wiki of the inflation-adjusted i.e. real oil price since 1861.
As we can see, the normal price for a barrel appears to be $20 (last seen in 1999!), which is the bare minimum actual cost of extracting it enough of it, everything above that is manipulation/volatility.
I explained why the price of oil is so easy to manipulate and/or so volatile here: basically, both supply and demand are insensitive to changes in price. For whatever reasons, whoever has been manipulating up the price of oil for the last 15 years has decided to allow it to fall a bit, so far it has fallen from $110 to $70 in only four months…
So that's this week's Fun Online Poll: "How low will the price of a barrel of oil fall over the next year?"
Vote here or use the widget in the sidebar. I voted $40.
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4 comments:
It's worth looking at these charts:
http://pricedingold.com/crude-oil/
Essentially, the price of crude oil is lower now than at the end of WW2 - if priced in gold. What has happened is that the USD (and all other bad monies) have plummeted in value, especially since 1971. This is exactly the effect of 'inflation'.
L, yes, but the $ price of gold is also manipulated and inherently unstable.
I accept that "$1" or "£1" as a unit of measurement or store of value of gradually being depleted at maybe 5% a year, but that is still stable; if you have £1 in your pocket today, you know in PP terms it will be worth at least 95p in a year's time.
If you have £1's worth of gold in your pocket, it could be worth anything between 50p and £1.50 in a year's time.
MW. Yes, to a degree the 'price' of gold is 'manipulated'. But, gold is used, still, as the universal money.
And indeed the same weight of gold could be 'worth' 50p ot £1.50 from time to time. Trouble is the prices of other commodities and products and services are stable in gold terms. That is it is the fiat currencies that are unstable.
Note also, I am no 'gold bug'.
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