Monday, 19 March 2012

Memo to Cameron and Obama: if you want cheaper oil, stop printing money!

"The point Ron Paul makes is a very simple one: when you print money everything – including oil – gets more expensive. Sure it may suit the Obama/Cameron narrative to insist that the oil price rise is down to external factors like Chinese demand or the tensions with Iran. But the truth is that a lot of it is a problem of their own making thanks to Quantitative Easing (QE) policies which are not only stealing money from savers, encouraging a misallocation of resources, and punishing pensioners, but which are also massively increasing the cost of living and the price of oil.

As Paul notes, "someone is stealing wealth and it's very upsetting."

As Paul also notes, by some measures, the price of a gallon of gasoline has gone down since 2006 (when Bernanke took over the Fed) not up. He demonstrates this by pulling a silver ounce from his pocket. Six years ago that silver ounce would have bought just four gallons of petrol in the US. Today it could buy eleven gallons. The difference is the devaluation of the world's reserve currency caused by quantitative easing.

Think of that next time you hear an expert telling you that QE is the measure best designed to save us all from ruin."

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