I’m sure you’ve read the papers and realized that the world’s economies are in a bit of trouble at this time. But one thing that is puzzling during this time of global economic meltdowns is why the price of oil we hear about in the media each week is not higher than it is currently. Financial expert, John Mauldin, provides an excellent answer to in his piece titled, “Things That Make You Go Hmmm.” Mauldin’s piece explains that the price of oil we hear quoted in the U.S. media is West Texas Intermediate which is now priced in the $80’s per barrel. West Texas Intermediate, however, is no longer the global benchmark for the price of oil. After explaining why WTI is not the benchmark for the price of oil, Mauldin makes this statement,
“Naturally, it is useful when one is in the business of managing an economy and attempting to control inflation while simultaneously printing as much money as one can get away with, to be able to point to a falling oil price as evidence that the dreaded spectre of inflation is not an immediate concern and the weakness in WTI [West Texas Intermediate] has afforded the US government and their Central Bank sidekicks the luxury of being able to do that, but the stubbornly high price of Brent is becoming something of an irritant.”
Well now that really does make you go “hmmm.”
To read the full article by Mauldin click here: http://www.johnmauldin.com/images/uploads/pdf/mwo090511.pdf
