As markets continue to yo-yo and commentators deliver mixed forecasts, investors are faced with some tough decisions and have a number of important questions that need answering. On a daily basis we are asked what's happening with oil prices alongside questions on China's slowdown, which commodities or instruments will provide safety in the current environment, will the Euro-zone split in the future and what impact the presidential election is going to have on the economy and markets?

To help Oilprice.com look into these issues and more we were fortunate enough to speak with the award winning economic commentator Mike "Mish" Shedlock.

Mike's blog: Mish's Global Economic Trend Analysis is one of the most popular and informative economic blogs online. His millions of dedicated monthly readers find his advice invaluable and we recommend anyone interested in learning more about the global economy and financial markets to stop in and take a look: http://globaleconomicanalysis.blogspot.com

To find his blog, you can also do a Google search for Mish

In the interview, Mish discusses:

+ Why global trade will collapse if Romney wins

+ Why investors should get out of stocks and commodities

+ Why we have been oversold on shale gas and renewable energy

+ Why oil prices will likely fall in the short-term

+ Why the Eurozone is doomed

+ Why there may soon be an oil war with China

+ How government interference is ruining the renewable energy sector

+ Why we need to get rid of fractional reserve lending

Oilprice.com: With oil prices now in the high 80's and news out of Europe getting worse every day, do you expect prices to stay in this range, or do you see them dropping in the short term?

Mish: There are two conflicting forces here. One of them is oil prices over the long-term and the other is oil prices over the short-term.

Even in the short-term you will find there are conflicting forces at play. For example, stress in the Middle-East puts an upward pressure on oil prices. However, economic problems in Europe, a slow-down in Asia and a slow-down in the United States put downward pressure on oil prices. New orders are falling at a staggering rate across the board in Asia, China, Japan, Europe, and the United States which also puts further downward pressure on oil prices.

Long-term, forces such as peak oil and population growth in China are putting pressures to the upside.

One needs to balance all of those factors out when they are about ready to give a prediction on oil prices. My opinion is that over the short to mid-term, oil prices will go down. Long-term, energy is a good place to invest.

Oilprice.com: If your prediction is correct and oil prices do go down - what sort of impact do you see this having on the U.S. economy, if any?

Mish: That's an interesting question. However, the question puts the cart before the horse.

Looking at prices in a vacuum is a mistake. One also has to look at why prices are doing what they're doing. For example, falling oil prices that happen when supply shocks are alleviated are a positive thing. Falling oil prices because of falling demand is another. You seldom see this kind of distinction in mainstream media.

Right now, oil prices are primarily falling because of falling demand, and that is in spite of geopolitical tensions. That is not a healthy sign for the economy.

Oilprice.com: As we have seen with the recent oil workers strike in Norway and subsequent rise in oil prices. Geopolitical risks always remain to keep the markets off balance. Apart from Iran are there any other geopolitical risks you think people should be aware of?

Mish: A key geopolitical risk in the long-term is that China cannot continue at its expected rate of growth. For years, the mantra has been "China, China, China," and many thought China could maintain its 8% to 10% per year growth going forward. That's not going to happen.

I agree with Michael Pettis at China Financial Markets, that China is more likely to see 2% growth than 8% or even 6% growth over the next decade.

2% growth is a shocking reduction, even from the lowered expectations that we've seen regarding China. The implication is commodity prices, especially base metals, are going to be under extreme pressure because of China stockpiles. For further discussion please see "China Rebalancing Has Begun"; What are the Global Implications

Oilprice.com: What are your longer term projections for oil prices - say 3-5 years out?

Mish: I think it's a fool's game to make such projections. Most of the projections on the price of gold, silver and oil are ridiculous. They are designed to sell newsletters. The bigger the hype, the greater the sales. On occasion, I will make a call. For example, when crude hit $140+ in the summer of 2008, and others called for $200, I said oil prices would drop to the $45.00 - $50.00 range or so. Oil went to $35.

Moreover, those predicting $200.00 never bothered to think what that would do to the global economy. We saw the same thing in natural gas. People were predicting $25. Look at prices now, at roughly $3.00 NG fell all the way to $2.20, lower than even this staunch deflationist thought.

I'm not willing to go out on the same limb and predict energy prices three years in advance. The reason is we really don't know for sure how central bankers are going to respond. China is particularly important. If there's universal printing of money everywhere, I would expect a lot of that to flow back into prices of gold, perhaps of silver, and perhaps energy, but we really don't know what they're going to do. We don't know when or how the Euro Zone is going to break up. I think it will, but how is as important as when.

In the US, we don't know the results of tax hikes following the 2012 election. Heck, we don't even know who the next president in the United States is going to be. Will it be Republican? Will it be Democrat? Numerous political and economic forces are pulling and tugging in different ways.

I don't believe there's anyone out there that can predict, with any kind of accuracy, what oil prices are going to do. Which is why I believe trying to predict oil prices in the midst of all of these possibilities is a fool's game.

Oilprice.com: What are your views on inflation and hyperinflation.

Mish: Hyperinflation is a complete collapse in currency. It is a political event that kicks off hyperinflation, not a monetary one. Hyperinflation talk hit an extreme when oil prices hit $140. Such talk was silly then, and it is still silly now.

Hyperinflationists in general fail to understand the role of collapsing demand for credit. The total credit market is over $54 trillion. Base money supply is $2.6 trillion and excess reserves are about $1.5 trillion. Seems to me we had huge expansion in credit and Bernanke is struggling to reignite demand. I suggest he will not succeed.

The idea the US$ will suddenly go to zero is ridiculous. The US is the world's largest holder of gold reserves, and that alone would stop it. Also note that Bernanke, as misguided as his policies are, is still beholden to the banking system. As such he has no desire for it to collapse.

As far as inflation goes, I am still widely misunderstood. I view inflation as an increase in money supply and credit, with credit marked to market. Deflation is the opposite. If one insists that inflation is about prices, then we are in a state of inflation with 10-year treasury rates below 1.5%.

For those who woodenly view inflation in terms of prices, well, prices may or may not rise. Price have generally risen, but credit is the key behind housing prices, family formation, hiring, and in fact everything driving the economy. So, where is credit going? Demographics and student debt suggests nowhere. Indeed, credit has gone nowhere in spite of heroic efforts by Bernanke.

Oilprice.com: You just mentioned that we don't know who the next president is going to be and sticking to this topic how big an impact do you see energy prices having on this year's presidential elections?

Mish: I don't think energy prices are what's on people's minds. What's on people's minds right now are jobs. Oil prices have kind of stabilized and in the very short-term they are likely to stay stable unless there are some dramatic results in the Mid-East or a dramatic slowdown in the US economy.

Both are possible, but a major US slowdown is arguably more likely. Regardless, I think energy prices are going to be a minor election issue.

Oilprice.com: The message on peak oil seems to be confused. Many are adamant that peak oil is the largest threat to ever face humanity, whilst others believe that with new technologies and new fields being found, peak oil is a myth and we are actually swimming in oil. What are your thoughts?

Mish: The idea that we're swimming in oil is preposterous. Moreover, abiotic oil is a ridiculous pipe-dream. That said, the idea that the global economy is going to come grinding to a halt in the next year or two because of oil is also preposterous (discounting a geopolitical Mid-East shutdown).

In general, I would side with the peak oil folks, noting that a global recession will likely pressure prices more than anyone thinks, barring a breakout of war or supply disruptions in the Mid-East.

Long-term, 8% growth in China is mathematically not going to happen. People really need to get a grip on exponential math and the implications thereof. If China does attempt to grow at 8-10% as some people have predicted, there's going to be an oil war of some kind between the United States and China because there's simply not enough oil.

For a good discussion on the limits of exponential growth, please see Calpers Pension Plan Reports 1% Return; Stunning "What If" Charts at Various Compound Annualized Rates-of-Return Going Forward