Oil Prices & Ramifications(3)

d) Money Supply Growth:


What we are seeing is not just oil prices but almost every single commodity.

The growth machinery cited above coupled with aggressive money supply growth policies undertaken by most developed nations over the last 5 - 7 years have resulted in a load of liquidity swishing in the system.


e) Shift In Balance of Power:


Due to the dependence on oil and their record prices, the producers have minted a lot of surplus cash.

Russia has used its proceeds wisely, effectively bankrupt in 1998, now Russia has more than US$450bn in reserves.

Russia is also using petro money to "control" the surrounding small countries via joint ventures and questionable deals.

China, realising its vulnerability has deliberately courted African countries with proven oil and gas reserves.


By Salvatore_Dali