{"id":218227,"date":"2022-08-10T13:52:20","date_gmt":"2022-08-10T12:52:20","guid":{"rendered":"https:\/\/www.forexmentorpro.com\/blog\/?p=218227"},"modified":"2024-05-24T18:19:04","modified_gmt":"2024-05-24T17:19:04","slug":"us-oil-and-inflation","status":"publish","type":"post","link":"https:\/\/www.forexmentorpro.com\/blog\/us-oil-and-inflation\/","title":{"rendered":"US Oil and Inflation"},"content":{"rendered":"

Hi Everyone,<\/p>\n

One of our James was formerly working in the oil industry. His trading performance since he joined us has been exceptional and he is doing very well and is now on a funded account.<\/p>\n

However, as every trader he is also facing some roadblocks and issues and he felt like he was drifting off a little. Then his Mentor Marc advised him to dig a little deeper on his analysis and do more research with his pairs so he is more confident.<\/p>\n

Here is an article he wrote in our forum which is quite interesting as he takes a dive into US Oil and inflation. James in his own words below:<\/p>\n

In the past few weeks, I\u2019ve not been making the trades I could have and missed out on a lot of pips. I\u2019ve been informed to get back to what brought me success, one of these things was doing deeper analysis, so I\u2019ve went back to it.<\/p>\n

Below are my opinions only, hope they help but please don\u2019t take as gospel. It more for myself to start looking into things deeper and posting it on here keeps me honest.<\/p>\n

Dive into US Oil and inflation<\/p>\n

With US inflation numbers coming out again this week I\u2019ve been taking a dive into the theory that its from oil prices. I\u2019ve previously worked in the Oil industry for a long time and seen high and low oil prices but never seen these levels of inflation, so I found it strange.<\/p>\n

I\u2019ve placed the Oil price and Inflation on my Trading view chart using percentage increases to check for correlation over the years. Basic correlation doesn\u2019t equal causation understanding in place I wanted to get a bigger picture.<\/p>\n

\"Oil\"<\/p>\n

What you can see even in the period back between 2011 – 2014 we never witnessed the peaks in inflation like we see today but the oil prices were similar. I also checked the price at the pumps and during this period we could see the price at 4 USD. This time around we have seen spikes above the 4 USD, spiking at 5 USD but not enough to cause the inflation spikes in my opinion.<\/p>\n

\"\"<\/div>\n

Looking at the chart it looks like correlation was broken around March 2021, A quick google search shows me this was when the stimulus checks were sent. Like the video Marc shared a few weeks back, the only people who can cause inflation are the people with the money printer.<\/p>\n

\"\"<\/div>\n

Basic conclusion really isn\u2019t much difference from Marcs, don\u2019t trust what the government are telling you and inflation is more complicated than just price of oil.<\/p>\n

Inflation risks<\/b><\/p>\n

So, if inflation is more than just Oil prices effecting goods, what risks do I see coming up.<\/p>\n

The US are passing a few bills at the moment that they say definitely wont effect inflation so that was the first red flag for me, one is named the inflation reduction bill hmmmm.<\/p>\n

Economists have warned this can affect inflation but maybe not in the way they intend, also the tax increases put in place to assist pay for it could also cause put added pressure on households.<\/p>\n

Found this clip amusing<\/p>\n

\n

<\/i>\u00a0https:\/\/twitter.com\/i\/web\/status\/1556289419912642561<\/a><\/p>\n