I found some interesting data studying Oil vs. Gold and comparing it to Oil vs. dollar. It shows I believe in a clear way the FED/BigBank strategy to stabilize oilprice since the financial crisis. Until october 2014 … (updated slides)
I’ve also updated the slides with som comments on BigBank strategy on money printing.
Most importantly cheaper energy enables printing huge amounts of dollar for themselves while still deflating the currency. They have to do it as a counter meassure against falling prices in energy.So they will print more and increase debts and prices (stocks and prime real estate). If they don’t they will implode and their influence will quickly vane because debts could be paid off.
This is not a coincidence …
The big question is what will happen now. The banks have a really hard time stabilizing the oilprice because the strong sentiment following the bottoming out at $45 and then starting to rise. After that we saw several big banks reaching out in media to promote continued prices in the $40-60 range. We saw multiple explanations of high supply and low demand, high oil rig counts, etc, It seems to work at the moment.
My prediction now is a stable oilprice in the $40-$60 range and an inflating stockmarket due to massive money printing. The new money has to go somewhere … Also the lower energy prices will result in higher profits and consumption.
Taking the long view (~5 years) I predict Big Oil selling a combination of LENR produced synthetic fuels and Saudi Oil at about $10 /bbl. LENR for heating and domestic electricity will be decentralized in rural areas and using more advanced grids in the cities. Utilities will charge for infrastructure and support/maintenence. They will collect information everywhere (smart grids …). It will of course be possible to live off the grid, but it will be cumbersome.
In a slightly longer view (~10 years) I predict massive innovation in LENR on-demand hydrogen production for combustion and/or fuel cells/batteries for electric powertrains. Sterling motors will of course also be an interesting alternative. BTW All these devices will of course send data to the information grid (Internet of Things …).