This happened in the '70's.
The reason is that energy has an objective value, and the Arab sheikhs have nothing to do with it. If the price of energy is bid up to a point above that objective value, money will "get cheaper" to compensate.
Gold bugs are betting on this scenario. A bet on high gold is a bet that the world is running out of cheap oil. Maybe it's true; I don't know. My gut says no, but I could be wrong.
No, I think a bet on gold is a bet that rampant currency inflation will destroy the value of the dollar, and gold is a historic refuge from rapidly inflating currency. I see the price of oil going up as another symptom of inflation. The arabs are not stupid. Chart the price of oil in gold and it is nearly stable. Oil sellers just don't want the same amount of a devaluing assett (the dollar) in exchange. They want equal value, therefore a higher oil price.
No, I think a bet on gold is a bet that rampant currency inflation will destroy the value of the dollar, and gold is a historic refuge from rapidly inflating currency. I see the price of oil going up as another symptom of inflation. The arabs are not stupid. Chart the price of oil in gold and it is nearly stable. Oil sellers just don't want the same amount of a devaluing assett (the dollar) in exchange. They want equal value, therefore a higher oil price.