Monday 1 December 2014

Could cheap oil save us all.......

There has been an incredible fall in petrol prices over the last 2 to 3 months due in part they say to the OPEC nations continuing to produce while USA brings shale oil on line. 

This has created an oil surplus not helped by Eurozone countries cutting back on production ( Hooray for cheap oil ) while it has its own economic problems with inflation teetering on deflation ( Eutozone Inflation ).

If you saw the scenes on the Black Friday, the artificially created retail scrum, you'd be wondering what was going on. Either people have plenty of money in their pockets to be able to spend like that..... or they can't afford these items unless they are in such a sale, hence the scrum. Either way, most of these purchases will be on cheap credit and any economic good news in November and December needs to be taken with a pinch of salt, as the real picture of what is going on I doubt will become apparent until March 2015.

By March 2015, the good will and feel good factor generated by festive season will have worn off like an unwelcome hangover, and the bills will be stacking up on the door mat. The country will also be looking at a very unusual election, and possibly the end of 3 party politics, although to be fair the Lib Dems atrocious showing has probably ended three party politics anyway. So, I think 4 party politics is far nearer the mark with the big two scrabbling to build coalitions with whoever will be the King-maker.  

Let's see where we are with inflation then.

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