Silver as an investment

FSN: The Connection Between Oil Prices, Debt Levels, And Interest Rates

Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

from Zero Hedge

Submitted by Gail Tverberg of Our Finite World blog,

If oil is “just another commodity,” then there shouldn’t be any connection between oil prices, debt levels, interest rates, and total rates of return. But there clearly is a connection.

On one hand, spikes in oil prices are connected with recessions. According to economist James Hamilton, ten out of eleven post-World War II recessions have been associated with spikes in oil prices. There also is a logical reason for oil prices spikes to be associated with recession: oil is used in making and transporting food, and in commuting to work. These are necessities for most people. If these costs rise, there is a need to cut back on non-essential goods, leading to layoffs in discretionary sectors, and thus recession.

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