Oil hit aboove US$94 per barrel today. For some time, it hovered around US$88 and refused to go down. USD/CAD went below parity (didn’t hold though) for the first time since Sep 21. SOR rose from under 0.2% to almost 0.35% in a little over a week, even as USD/SGD fell from 1.3 to 1.26 in just over 2 weeks. As mentioned in a previous posting, SOR and SIBOR were expected to be going up. SOR is probably tracking the climb in LIBOR, which increased quite significantly in the past 3 months. Treasury yields have been on an uptrend as well.
These look to me like the unfolding of the flight to safety in July, which is in a sense, a return to normalcy. As at now, the price of gold is also picking up. I would personally look at the price of oil as a good indicator of reality, since it is consumed by everyone in the world, though it is also subject to some measure of speculation. Based on known facts such as the increasing world population and stagnating oil production, i would guess that the “normal trajectory” of the price of oil should be upward (assuming that whatever tricks they throw at the monetary system cancels out eventually), which we’re seeing in the current price movement. As usual, these are just my personal opinion, coming from someone without credential, so, with a pinch of salt, please.
