Oil exporting countries used to have a half Trillion dollars annual surplus which they recycled by lending to the Developed world. Now that figure has flipped to a slight deficit thanks to low oil prices. This means the Western world is missing (in terms of opportunity cost) $500Billion in annual new lending originating from OPEC members. The Federal Reserve added (or made a Keystone Cops attempt to add it) $3Trillion in cash to the economy with Quantitative Easing over four years, roughly double the pace of the lost source of OPEC member loans.
The implication is that interest rates …Read More