Silver, Gold, Oil, & Revolution

Silver, Gold, Oil, & Revolution



The price of crude oil has reached 100 dollars, because of the revolution and turmoil underway in the middle east. This uncertainty usually boost the value of the dollar as a flight to safety. But this time the dollar has been excluded as a flight to safety. This is very bearish for the dollar. On the other hand silver and gold have performed as the premier currency, rising in value lock step with each other. Crude oild fundamentals are not as bullish as gold and silver. Millions of Americans are still out of work. So there is no need to drive to work, take a vacation, or even, cruse down the local strip just to get away. So as you can see oil consumption in the USA has gone way down. Also stock piles of crude oil are also above average, so there are no issues with supplies either. The main reason oil has regained most of its value since the crash of 2008 can be attributed to a falling dollar. Oil, gold, silver, and other commodities are all priced in dollars, and when the value of the dollar falls then it takes more dollars to buy the commodity. Higher commodity prices for all. the fundamentals for silver on the other hand are very strong. Silver and Gold are money, and also a hedge against inflation. So with high inflation, limited supply, dollar devaluation, and record high global demand for the precious metals, you can see a very bullish case for both gold and silver. The US government will need to fund 1.7 trillion of deficit in order to pay for their huge budget. Since china and japan already own a trillion apiece, and interest rates held at 0% buy the federal reserve. Their debt investment has nowhere to go but down. The federal reserve will have to make up the difference and buy the US debt through further quantitative easing, further devaluing the dollar and increasing the paper value of commodities, especially gold and silver.