Gold and Oil fundamentals are married together

Crude oil is a very important commodity. Inflation, interest rates, and growth are all affected by it.


Oil shortages lead to higher prices, which leads to higher inflation and higher interest rates. This simple formula highlights that high oil prices are not compatible with high debt levels.

Some points

- Currently the USA federal debt to GDP% is 120%.
- US federal interest payments are likely to be over $1T in 2023 (FYI:US defense budget is $800BN).
- US federal interest payments are elevated during periods of high energy costs.
- Slower growth due to higher interest rates lowers federal tax receipts.
- High government spending while revenues are falling explodes the US federal deficit. 
- A larger US deficit results in more federal debt.
- Rinse and repeat from the top of this list.


Video 1: Significant oil shortages are coming.

Chart 1 : Gold moves higher during periods of energy inflation.

Chart 2: Oil is very Wyckoff accumulation friendly and should be on your watch list.

Chart 3: Gold support and resistance channel lines show the higher targets.

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