Forget The Oil Prices, The Whole US Dollar Bubble is Deflating – Peter Schiff to RT
- Forget The Oil Prices, The Whole US Dollar Bubble is Deflating – Peter Schiff to RT
by https://www.rt.com/
The drop in oil prices is likely to be short-lived, veteran stock broker Peter Schiff told RT, since the deflation of the whole US debt bubble and crash of the dollar will make the prices of oil and other commodities bounce up.
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Decline in demand for oil due to the coronavirus epidemic, further reinforced by the demise of the OPEC+ production cuts agreement, has crashed the US and world markets, sending traders into a panic-selling mode. The ongoing market turmoil will certainly hit the oil industry heavily, but the impact is likely to reach far beyond it, CEO and chief global strategist at Euro Pacific Capital Peter Schiff believes.
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“A lot of the heavily indebted energy companies are clearly going to go bankrupt and so, ultimately, those that survive will be in a position to make even more money as the price of oil re-bounce, which I do expect to happen,” Schiff told RT, adding that well capitalized oil companies will survive the crisis and ultimately benefit from it, once the prices start to pick up.
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US shale industry is bound to crash
The US shale oil industry is likely to be hit the worst, given its extremely high costs of production and maintenance. “Really, 50-60 dollars a barrel is kind of a minimum for a lot of these guys to survive. We didn’t even have that before and now we are in the low 30s, so this is going to cause a lot of devastation,” Schiff said.
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Falling oil prices may make gas at the pump cheaper in the short term, but consumers should not get too excited about it, since the upcoming economic recession will swiftly negate this effect, he warned.
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“People will get the benefit of having some cheaper gas prices, but don’t get used to it as it won’t last. People shouldn’t go out and buy a big SUV because they think the gasoline prices will stay down forever.”
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