Comment: Oil is inflated because

(See in situ)


Oil is inflated because

the value of the dollar has dropped so dramatically. The value of the dollar has dropped because the FED has increased the money supply so dramatically. This is what RP refers to as "The Inflation Tax".

In order to raise the value of the dollar, the FED has to raise interest rates. This will help shrink the money supply, thus raise the value of the dollar. If they do this, however, it will accelerate the collapse of the economy. People and businesses will not be able to afford loans for housing and growth. Homeowners with ARM's will not be able to pay current mortgages or qualify to refinance. The stock market will crash. This is what happened in The Great Depression - the tightening of the money supply. Remember, The Great Depression was building for 4 years before the FED did their dastardly deed and caused the stock market to crash.

Buying Gold and Silver is not an investment strategy it is a hedge strategy. It's like an insurance policy to protect against the 300 million car pile-up that the FED could cause. Think 1-4 years down the road. Use your imagination and envision the worst and prepare for it. The future is very uncertain.

Read melgesman's post "I wrote this to ..." He explains this much better than I.