Think again regards Big Oil versus small oil companies.
What do you think will happen to the small oil companies (also bigger players with high extraction costs, such as shale oil) when this recession keeps oil prices under $75 for an extended period?
They cannot make money at these current oil prices. Yet Big Oil can make money even when oil prices are low, due to benefits of economy of massive scale. This theme has been discussed many times on Bloomberg/CNBC. Small oil is already getting hammered much harder on stock price than we see with Big Oil.
we might face deflation
We MIGHT face it? Have you read the paper lately? CPI shows we are already into deflationary period. I should note that I do not expect gold to appreciate significantly during this deflationary phase for the overall economy.
