Cheap oil if you buy it in Gold.
The Wall Street Journal's good article last week about the price of oil and gasoline in real dollars was pretty well written.From that Article:
Since 2001 the dollar price of oil and gold have run in almost perfect tandem (see nearby chart). The gold price has risen 239% since 2001, while the oil price has risen 267%. This means that if the dollar had remained "as good as gold" since 2001, oil today would be selling at about $30 a barrel, not $99. Gold has traditionally been a rough proxy for the price level, so the decline of the dollar against gold and oil suggests a U.S. monetary that is supplying too many dollars.
What that means in real terms is we don't have high priced oil, we have a cheap and cheapening dollar. This isn't good news in the short term.
But, as the world turns with a 13 trillion dollar economy kicking in we will reverse the trend and you will see gold retreat as it always does, dollar recover from here as it always does, and the Euro retreat.
The Doomsayers are wrong.
pcND
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