One remarkable aspect of the recent runup in oil is that it’s decidedly not the result of a weak dollar. That was not the case in 2007 and 2008 when oil was going nuts, and New York restaurants were pricing their menus with euro symbols.
There’s no surefire way to measure oil ex-dollars, but measuring it in gold is a reasonable approach, since it’s the anti-currency. So let’s look at little further.
At the end of 2008, the number of barrels you could buy with one ounce of gold surged to ridiculous highs, the combination of a deflationary collapse (the oil drop) and global fear (the gold spike). But look since 2000 and the trend is clear. One ounce of gold is buying you less and less oil. We appear to be reverting to trend. Oil can go a lot higher.
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