Oil, gold and crypto #financefriday

Oil

The oil price has been volatile this week and so too have the share prices of the oil majors. With the war in Ukraine showing no sign of ending anytime soon, we can expect the oil price to stay over $100 a barrel long into the future. The summer has only just begun but Europe will have to prepare for next winter and worry about gas supplies. We can also expect petrol to be around £2.00 a litre for years.

Gold

Investors buy gold in times of trouble and surprisingly the gold price has been dropping too this week. At the time of writing it is $1483 an ounce, down $18 an ounce this week.

Crypto

Cryptocurrencies had a terrible week but they seem to be recovering a little today. Bitcoin is on $21569 this afternoon. Crypto fans will say it is a good day to buy! I thought that maybe the crypto bubble was finally going to burst this week but it is still finding more punters.

Stock markets

The markets have been really volatile this week. The falls have been big but so have the recovery days. Today the FTSE100 is on 7191, up 2.28% and so recovering some of the week’s losses. BP is paying a dividend today from those profits it is making from the high oil price and Shell will pay its dividend on Monday. Both companies pay quarterly dividends. Rolls Royce has offered to pay its workers a £2000 bonus to help with the cost of living. Lloyd’s Banking Group offered its staff a £1000 bonus. It was obvious that we would have to pay for the pandemic with inflation after the huge amount of government borrowing and money printing by the Bank of England. Lloyds staff accepted the bonus but the RR bonus was rejected by the union. If all workers were given a bonus, rather than getting into a wage-price spiral for years we could maybe restrict inflation to just a 2022 spike. I don’t think that will happen but you can see the thinking behind these bonuses. Does the government see the logic of bonuses? I doubt it.

The future

The future doesn’t look great, does it? The pound in our pocket will continue to be devalued by inflation. Those in debt will benefit eventually as their debts get inflated away. The government has the biggest debt and that will be inflated away too. As prices rise, VAT receipts will rise too and as incomes rise so will income tax and N.I. receipts. In the short term, most of us will be worse off, unfortunately. Energy costs and rising food prices will cause pain for millions next winter.

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