Oil Price Risks Put Inflation Back In Focus

by JASmius

Sounds downright....transformative, doesn't it?:

Iraq will be foremost in investors' minds in the coming week as oil price risk has returned to markets, complicating the task for central banks whose policies are beginning to diverge for the first time since the global financial crisis.

Oil prices neared nine-month highs late last week, touching $115 a barrel in New York futures trading, and the rapid advance of militants in Iraq, the second-largest OPEC producer, is destabilizing oil markets.

That has implications for inflation in the United States and Europe, as well as Asia's export-oriented economies that are large net importers of oil.....

"Just as oil prices had become increasingly stable, we reckon the risk for an oil price spike is now the highest since the global crisis," said Christian Keller, an economist at Barclays. "We think a further price spike of 10% to 15% from here is not implausible," he said....

Fits right in with O's 2008 promise to make energy prices "necessarily skyrocket," doesn't it?  Combine that with his unconstitutional imposition of cap & trade by executive decree and continuing embargo on U.S. domestic energy exploration and the stage is set for another calamitous economic "event".

That's the "stag" part of the equation.  And the "flation" part is following right behind:

In the United States, investors will be looking to the third and final reading of U.S. first-quarter GDP figures on Wednesday to see if there is a revision of the 1% contraction already printed and which followed disappointing March trade figures.....

Core U.S. consumer prices have risen 2% over the last year. If the inflation rate went much higher, it would put pressure on the Fed to consider moving to raise rates.

Aaaaaaaand what happens if the Fed raises interest rates?  The interest on the on-books federal debt rises with it, federal interest payments "surge," the deficit/debt problem metastasizes into its final crisis, contributing to the already existent economic emergency, creating a runaway collapse inevitably compelling calls for the government - which is to say, Barack Obama - to "do something!", and, well, I think you can see where this is headed.  Either that, or, given the extent to which the Obama debt sinkhole has been monetized by the Federal Reserve, a runaway hyperinflation landing the nation in pretty much the same place of prostration.

True, those are the worst case scenarios.  But the question isn't one of "if," but of "how soon".  History shows how quickly these "events" can happen.  And The One needs them to unfold in the next two years.

The stage is set, and the fuse is primed.  All that remains is ignition.

Now you know why he still smokes.