There really hasn’t been much going with the global oil supply. No hurricane or pipeline explosions, no tankers grounded in some pristine wildlife area, and with most of the heavily populated industrial northern hemisphere entering the “slow” season, no heavy petrol demand. Yeah, there's a problem between the Turks and the Kurds but it involves Iraqi pipelines. Tensions are rising, but isn't there a war going on over there? I mean, if we believe all the war hype....how much worse can it get?
But what has changed dramatically over the past two years is the global supply of the U.S. dollar. The Iraq War arguably has dumped a couple hundred billion dollars into the mid-east economy with almost no accountability.
Oil Hits New Record:Add to this the recent housing mortgage lending crisis and the Fed literally pumping tens of billions into the domestic economy, the lowering of interest rates and the return to easy money. Simple laws of money supply and demand. I'm barely scratching the surface here.
Many analysts argue that the supply and demand fundamentals don't support oil in the high $80 range, and believe speculative investing is the real culprit behind high oil prices.
If Dollar Free falls, then what?:This is one area where American officials disagree. Many think that China and the others wouldn't dare trade in their Money Bonds on the low.
If the dollar trend continues spiraling downward, the risk is that nations like China – or Japan or Saudi Arabia – which have been buying U.S. Treasury bonds and thereby funding America's deficit, would stop that practice.
The U.S. dollar has fallen in value against five major currencies, the Japanese Yen, the Euro, S.Korean Won, British Pound and the Canadian dollar. For the first time in over 30 years, the Canadian dollar is equivalent in value to the U.S. dollar all the while President Bush seems unconcerned or oblivious. The high price for oil may have less to do with the global oil markets and more to do with global financial markets, particularly the value of the U.S. dollar. It’s going downhill……fast.
Read additional:U.S. Currency Strategy With China
Healthy Wisconsin Revival
Well……that settles that. Now that the Assembly Republicans wouldn’t pass a state budget even without Healthy Wisconsin, we know that wasn’t the problem. Now is a good time for Senate Democrats to re-introduce it.
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