RE:$200 oil???A mid-range gold forecast for end of the year, from three of the bigger US financial institutions (Goldman Sachs, BofA, and Chase, if I recall correctly) is roughly $3,200. The gold to oil relationship historically averages 16 to 1, with a range of 10-30 to 1. If history is any guide, oil at the end of this year will be as follows:
$107 (cheap)
$200 (long-term average normal)
$320 (expensive)
Why does everyone expect oil to stay in historical dollar ranges when dollars have lost a whole bunch of value over the past few years due to inflation?