Publications: Notes at the Margin

The Influence of Central Bankers: Dark Fiber vs. DUCs (August 7, 2017)


Robin West, a founder of the Petroleum Finance Corporation, was the first to suggest that Saudi Arabia was the "central bank of oil." West, having no understanding of a central bank's true economic role, was incorrect. However, to paraphrase Sir Thomas Gresham, bad ideas and fake news have a way of obliterating the truth. Thus, for years, many have used the central banker analogy when referring to the Kingdom. Over the last year, though, a sliver of truth has materialized regarding the link between central banker actions and the role of oil producers. Specifically, central bankers in recent years have demonstrated the ability to create bubbles. Oil producers have copied them.


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