Understanding the Massive Capital Flows Into the Oil Sector

Earlier this week, David Stockman discussed the massive amount of capital that has been flowing into the oil production sector and how it will likely lead to a crash in the sector (SEE:The Shale Oil Crash Could Be Worse Than the Housing Bubble Crash).

Now the Federal Reserve Bank of Atlanta is out with data on how major the money flow has been into the sector:

As a fraction of total investment on nonresidential structures, spending on mining exploration, shafts, and wells has been running near its 50-year high over the course of the current recovery. As a fraction of total business investment in equipment and structures, the current contribution of the mining and oil sector is higher than any time since the early 1980s (and generally much higher than most periods during the last half century).