Just As In the 1930s, Liquidity Preferences Still Rule

The price of oil has confounded most mainstream predictions. This has been true for much more than the past year, of course, when going back to 2014 the price was thought exceptionally stable. Everyone knew the US was pumping massive quantities out of newly developed shale fields, but until that summer it was believed that an accelerating global economy (demand) would easily absorb the excess. Even when oil prices crashed at the start of 2015, it was proclaimed nothing but a “supply glut” and therefore a “transitory” issue not worth notice or concern.