Thursday, November 04, 2010

Prediction: Gasoline will be over $6 a gallon by 2014... or before.

There are two main reasons for this:

[1] The Feds' recent action of "quantitative easing"* we will see more than double the current cash (M1 = currency) injected into the global financial system. This was done to hold interest rates low, so more cars and houses can be sold - jump-starting the economy. Well... cars have already increased (# sold) and house prices have been on the way up.

[2] China's and India's continued rapid economic development (and the growth of new vehicles needing oil). Research on this growth (and impact to oil prices), can be found, here.

Hold on, it's going to be an even rougher ride. Thank you, Feds.

* Also known as printing money - to the tune of $600 billion + reinvestment of previous proceeds brings the total cash being poured into the system brings the total to $900 billion!



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