The recent escalation in oil prices (largely driven by speculators) has seemingly been muted by Saudi Arabia's promise to compensate for any loss in Libyan oil production.
However, trouble may brewing for the Saudis themselves. A "day of rage" has been planned for March 11. Wikileaks has released reports detailing the decadent behavior of the Saudi nobility.
In a land where many of the young are unemployed,this may be a recipe for revolution. For the rest of the world, it may mean the mother of all supply shocks. Contrary to the predictions of analysts like Austrian School advocate Jim 'hyperinflation is imminent' Rogers, the result could be a disastrous bout of deflation.
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IIRC Galbraith père said that the real problem of the 70s oil shocks was deflation because OPEC couldn't spend all its dollars fast enough.
The Saudi's had their hand in the 70's and 80's several times either opening the spiguet of oil until prices dropped, or closing it allowing prices to go up if not just creating lines around the block.
If they are attacked by protesters, then opening the spiguet to the maximum would create deflation. Is that the idea here ?
Ok let me clarify for Red Rock :
After 9/11 the economy tanked for reasons of 9/11 but also because in general things were going south anyway since the budget was balanced and all that.
Bush and his cronies went out and asked everyone to go shopping in the name of patriotism and all that.
Now, we have a worse situation, and NO WHERE are the Bushes, the Tea Party wackos, and anti-semitic Austrian Economic dingle berries are found asking Americans, the institutions, the states, and other entities to come out and spend and to shop in the name of patriotism.
Why ? because they are cornering Obama ( or trying to ) just like they did with Carter ( who did a great job of reducing spending which is why the economy tanked with him at guard ).
Why are they cornering Obama ? one of the reasons is yes that he is black, that he is probably a muslim, that he is a socialist, that he is spending too much money.
SO MR RED ROCK READ UP AND SHUT UP.
Goog,
I'll give you the same warning I gave Red Rock. Let's be civil here.
I have not called anyone any names or there state of mental health.
I do concur with your appeal.
"Contrary to the predictions of analysts like Austrian School advocate Jim 'hyperinflation is imminent' Rogers, the result could be a disastrous bout of deflation."
Interesting comment, would you be able to walk me through how we could get deflation?
Thanks
Paul
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