In case you weren’t sureÂ how much of an impactÂ fiscal policy could have on the markets, you should take a look at this chart of July futures for Crude Oil.
One of my coworkers brought this to my attention the other day.
Of course you can’t necessarily say for sure that the economic stimulus plan triggered the latest big rally in oil prices. It’s an awfully interesting coincidence, though, don’t you think?
Why would there be a relationship? Because the stimulus package put about $150 billion back into the economy. Inflation comes in part from increasing money supply and partly from increased demand. The package was designed to accomplish both. The USD chart shows exactly that.