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Well, the Treasury and the Fed are printing money like there's no tomorrow. The basic rule of supply and demand, the more of something you have, the less it's worth. And the dollar is falling at this moment, so the less a dollar is worth, the more of them that it's going to take to buy a barrel of oil.
To drive the point home, let me tell you a story about peanuts. I'll try to keep it short.
Back in the 80's when I was reduced to working as a miserable guard at MSP, there was an oversupply of peanuts. Now you must understand that everything in the joint is currency for the con's, cigarettes, dope, the home made bread that they claimed us screws put saltpeter in (I thought it was pretty tasty), and even the lowly peanut.
The USDA had an oversupply of peanuts. So they started giving them to the con's. Came in gallon cans, with the USDA stamp on the sides, and there was no end to the supply.
When they first started passing them out, the con's were hoarding them. It wasn't long before every cell had probably 10 gallons of peanuts in it. It got so bad that the con's were leaving big bowels of peanuts in the office for us screws (and they hated our guts), just because they had so damn many peanuts that they were worthless.
I was working as a rover one night, and we were searching the garbage behind the kitchen. And right in the middle of all of that garbage was a 55 gallon barrel full of, you guessed it, peanuts. They had so many peanuts that they were throwing them away by the barrel. I learned something that night.
I came to the conclusion that if you wanted to win the War on Drugs, just give everybody a 55 gallon barrel full of dope. Whatever they want. Then give 'em some more. After a while, the one's who didn't OD would get tired of it. Besides, it would be worthless, since everywhere you looked there was a barrel of dope. On top of that, you would run the cartels and dealers out of business.
Kind of the same thing is happening to our currency. Now that doesn't mean the the Government, speculators, and the oil companies don't stick you when they have a chance, even if they have to create one. They will.
But to be fair to the oil companies, they are the only one's who are actually producing anything. And they are making less on a gallon of gas than the FED Gov.
But who asked me, huh
Chas
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