I strongly agree. IMO the emerging trend is a massive repricing of food/energy at the expense of "paper" and other leisure assets. The securitization of home lending has perhaps turned RE into an asset correlated closer to stocks than Gold. Too bad. How many gallons of gas were the BoSox worth in 1972........ If I were John Henry I'd get out of baseball and buy Corn on this dip.
The fed is just a market mirror at best. The market is a problem solving machine for the economy. Prices moves to where prices needs to go in order to fix future imbalances. I think an equity boom is needed, falling oil prices makes this possible and even likely. Many needs to be screwed to fix fundamental problems (demographics). The fed is not smart enough to do this..
i am not sure it is really worthwhile to answer the OP. $28 a barrel is a total nonsense. Finding costs and development costs are not running as low as they were 10 years ago. Today some oil is being acquired (not pumped off the ground) at $28+, e.g. APC. Add to this energy to get the oil up, transport costs, labor costs, margin, etc and you see that many marginal producers are going to start dropping when oil goes below $50. And I do not need to say that there is not much spare capacity floating around..... 1+1=?
Oil will not get below $40 IMO. But inflation will overcome it, so oil relatively speaking will become cheaper (actually less expensive). It has already happened, historically.
I hate to say never in the markets, but it would not surprise me if oil did not hit $28 for a very long time indeed. I think it's more likely to hit $150 than $28 in the next 5 years or so.
I don't believe in 28$...The prices like this will blame western oil&gas players first of all. More resonable to suppose 40$