I was just perusing the net, and found this excellent website:
http://www.globalbaserates.co.uk/
On this site you can see historical interest rates from around the world, on one graph in easy to understand format.
Really shows you what an impact peak oil is having.
PeakOil is You
The effect of peak oil on global interest rates
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The effect of peak oil on global interest rates
by dr_doom » Thu 26 Jul 2007, 19:32:16
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Re: The effect of peak oil on global interest rates
by Tanada » Thu 26 Jul 2007, 20:06:44
Judging by that graph I think the US Fed Res is going to have to raise rates just to regain controll of the falling dollar.
$this->bbcode_second_pass_quote('Alfred Tennyson', 'W')e are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: The effect of peak oil on global interest rates
by MrBill » Fri 27 Jul 2007, 06:06:35
Sorry I posted this elsewhere, but I think it is equally applicable to this thread.
$this->bbcode_second_pass_quote('', 'F')irst of all higher prices from increased demand for commodities, energy and base metals from an expanding global economy is not inflationary. They are a one time shift higher in price, which shuld be offset from demand destruction somewhere else in the economy.
Higher prices reflect scarcity and ratcheting up costs in sourcing these basic resources.
What is inflationary is to increase money supply to accomodate those price increases.
This is what the world's central banks are doing at the moment when they sterlize export receipts from oil producers and Asian exporters. They take US dollars (or euros) out of circulation in their local economies, by printing more local currency instead, and then re-invest those excess foreign exchange reserves offshore, which is back in the USA (or Europe in the case of euros).
Every current account deficit equals someone else's current account surplus no matter what. It is an iron clad rule. The same for trade surpluses and deficits. You cannot have one without the other.
Source:Stagflation$this->bbcode_second_pass_quote('', 'F')irst of all higher prices from increased demand for commodities, energy and base metals from an expanding global economy is not inflationary. They are a one time shift higher in price, which shuld be offset from demand destruction somewhere else in the economy.
Higher prices reflect scarcity and ratcheting up costs in sourcing these basic resources.
What is inflationary is to increase money supply to accomodate those price increases.
This is what the world's central banks are doing at the moment when they sterlize export receipts from oil producers and Asian exporters. They take US dollars (or euros) out of circulation in their local economies, by printing more local currency instead, and then re-invest those excess foreign exchange reserves offshore, which is back in the USA (or Europe in the case of euros).
Every current account deficit equals someone else's current account surplus no matter what. It is an iron clad rule. The same for trade surpluses and deficits. You cannot have one without the other.
So on one hand I am very encouraged that many (not all) central banks are raising interest rates to combat inflation. But they may be doing themselves a disservice by not hiking them fast enough to stem money supply growth. Money supply growth is still very stimulative, which ultimately ends up with higher inflation and therefore higher global interest rates to combat its effects.
$this->bbcode_second_pass_quote('', 'T')he answer is, it depends on what the monetary authority in the importing country does. A sovereign central bank isn't a
``price taker,'' or an inflation accepter. Instead, it always has the ability to offset any relative price change, be it in domestic or foreign goods, with tighter monetary policy.
Source: Central Banks and Inflation
Commentary by Caroline Baum
July 25 (Bloomberg)
There is no reason that peak oil should lead to higher interest rates. Unless central banks print the money to accomodate higher prices instead of letting demand destruction work its magic.
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
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Re: The effect of peak oil on global interest rates
by sirrom » Fri 27 Jul 2007, 09:37:53
we need a graph that shows global oil price to compare it too,because otherwise a graph just showing global interest rates is a bit useless.
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