Funny: Oil going cheaper in a money-print vortex

In last few weeks we see a market paradox - central banks officially are printing money, Gold and food react as expected - by going up, and at the same time Oil is going down. How this is possible? The markets are over flooded with dollars, yens, Euros, pounds, Swiss francs and much other less popular currencies in an effort of everyone to devalue its one and win positions in currency war. And at the same time currencies are becoming more expensive compared to so fundamental resource like Oil.

I think the answer is very simple - there is an non market intervention to artificially lower the oil price due to US elections. The intervention is very powerful, but as such measures are usually very expensive, so they can not be spread on all markets. That's why the markets of food and Gold are reacting logically on money-print explosion, while Oil is reacting in an absurd way.

Oil is sensitive for the US elections so the market manipulation is focused there. Obama needs lower gas-prices and some financial an global factors are helping him. But for clever traders it is just a good chance to buy cheap.

Every such type of intervention is temporary. It can not last forever. Usually after such a measure, the prices explode to compensate all the time they have been pressed down. So if you buy Oil now, or generally before election day, soon you will have a good profit.

The formal reason of going up will not be the pass of the election. May be another reason will be invented. But there is no way to avoid the inflation in energy. As one of the first products to react to money-print, energy and resources can not go down when money supply goes up.

It is highly probable also that soon after the election day the long expected Israel vs. Iran crisis will start. Israel now is also waiting for US elections to pass. But the conflict looks inevitable as Iran nuclear program is progressing constantly. This is the most probable "trigger" of Oil going up. The politicians need an excuse for the inflation they are producing and the Iranian nuclear project-bomb will be the perfect culprit...

But generally - when Obama is artificially pressing the Oil price down, you can be just happy of this and buy... :)))

September 28th 2012