Haim, that scenario i doubt very much. there is ample liquidity, true, but lots of black holes gobbling it up is my guess. if Saudi Arabia can deliver on a promise of lower oil prices remains to be seen - however, the rise in crude is certainly based more on emotion than fact (i.e., there haven't been any disruptions to supply yet), so i would agree that it will likely drift back in the near term.
the petro dollars, like all liquidity, will drift toward inflating assets, not deflating ones. the stock market is certainly NOT home to inflating assets at the moment, and hasn't been for well over a year.
if you're referring to the Prince Al-Waleed, the dude bought the NAZ big when it crashed last year in April, and with his investments increasingly under water can be expected to talk his book.
the problems the economy has run far deeper than what is immediately apparent...in a deflationary era, commodity prices can be expected to plunge, and oil is merely a special situation due to the geographical placing of the world's largest oil reserves. the economy's main problems are however massive industrial overcapacities and a huge mountain of private sector debt....both not curable by means of lower oil prices, which by themselves would only be reflective of a collapse in demand. |
