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Written by Tin Man for The Initiative Group
As reported recently in the media, the two main transatlantic players, that of Great Britain and the USA, have announced their intent to release the two nation’s strategic petroleum reserves in a joint effort to damper rapidly rising oil prices. “It’s something worth looking at. Short-term should we look at reserves? Yes, we should,” remarked Cameron “We’d both like to see global oil prices at a lower level than they are.”
Now we must remember this of course could be just a ploy as the mere mention of a strategic release will (for a few weeks) be enough to halt the almost parabolic move in Brent crude seen in recent months. It is however impossible to prevent long-term oil prices climbing, even Cameron himself clearly qualifies his and Barack’s brainwave as a “short-term” solution. Yes the inevitable $200 barrel oil will become an accepted reality in coming months (regardless of any supply disruption, such as another war in the Persian Gulf) and the damage this does to corporate earnings and GDP is little discussed.
And so while our nation prepares to sell its oil to china on the cheap, in an attempt to calm the pending oil storm, the real cause of the problem is left aside. That being the unprecedented increases in central banks’ balance sheets in the last 3 years and perhaps something wicked this way cometh.
China Crude imports. (source: zerohedge)
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