Inflation is unlikely to flare up again as long as commodity prices remain depressed. Inflation helps countries, companies and households that have high debts to pay them off because it reduces the value of the debt, so without it the world is slowly walking into a debtors’ nightmare.
The price of oil has fallen victim to market uncertainty following the Greek referendum. The Brent international crude prices have fallen below $60 a barrel, with a drop of more than 6% recorded on Monday, the biggest intraday fall since February 4 according to the Financial Times.
The paper says oil is headed for a bear market, and some analysts watching the commodity agree that the price of oil has further to fall.
Oil prices have always had a big political component, but it seems that increasingly they also have a financial, speculative one. And if this means oil stays cheaper for longer, we may be in for a very strong economic boom.