The nuclear plans of Iran and your mortgage
It is curious to see economics as there are subtle interrelationships among various factors that should a priori be completely separate. This is the case with the nuclear plans of Iran and your mortgage.
One of the many causes of the rise in rates we are experiencing is due to fear of high inflation due to the impact of oil on prices.
In a little less than a year, we have gone from $ 80 a barrel to about $ 50 which should alleviate fears of inflation global economic outlook and give a respite to rising rates and may even lead to a future drop. But is this a structural fall? ¿Come back again to have cheap oil? Why this sudden drop so?.
The oil market is well handled, on the one hand the prices of producer countries and other large investment funds (Hedge founds). But we must not forget the geopolitical tensions and the dependence of certain countries in the price of crude.
The most widespread rumor about the current situation we live in, says that Saudi Arabia could be working with USA to lower the price of oil to that level, that Iran would enter into a severe economic crisis that forced him to negotiate with the West and give up their plans Nuclear. A drop to $ 45 barrel of oil completely destabilize the Iranian economy, returning from a GDP growth of above 5% to a situation of hyperinflation and economic chaos which currently can not afford.
Therefore, it is possible that in the coming months to see oil back above $ 60 and leans back, the specter of inflation and hence further rise in rates.
Written by Carlos Lopez on Jan. 18, 2007 with 9 comments
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