Originally Posted by JOG
Originally Posted by mike762
Well, he has a point. Debasement of the currency via inflationary monetary policy has a great effect on the price of all commodities including oil. Oil priced in gold or silver is pretty much where it was in 1971. Taking away the gold backing for the FRN$ is THE proximate cause of the increase in the price of oil. Supply and demand and political vagaries also influence the price, but there is no denying that currency debasement plays a very large role.


Only at the pump price. The effect of the FRN$ on the cost of oil prodution isn't a factor. 'Drill here, drill now' assumes an oil company can improve profits while investing billions in domestic oil production in a country where there are no lines at the gas station.


Not really. It has also been pretty consistent at the spot price too. The average has been 13.5 barrels of oil per one ounce of gold since 1970. The low was 10.1 in 2000 and the high was 17.1 in 2010. The more monetary madness induced by the Fed, the higher that ratio gets. In 1980, 1990, and 2010 the ratio was 16.5, 16.5, and 17.1 bbl/oz respectively. Those times were also characterized by debt/currency crises induced by Fed monetary policies.

If the American People allow private banks to control the issuance of their currency, first by inflation, then by deflation, the banks..., will deprive the People of all their Property,...Thomas Jefferson