Tuesday, April 19, 2005

Don't Blame OPEC; Higher Gas Prices Are Almost Entirely Bush's Fault :: ILCA Online :: Making Labor Media a Force to Be Reckoned With

Don't Blame OPEC; Higher Gas Prices Are Almost Entirely Bush's Fault :: ILCA Online :: Making Labor Media a Force to Be Reckoned With

8 comments:

Jody said...

Of course if you believe the dollar was massively overvalued in the late 90's, then that whole article falls apart.

heatkernel said...

What do you mean? It could be that it was "overvalued" in the late 90s and is now "correctly valued", but the fall in the dollar's value is still causing a rise in oil prices. All that matters is what the value of the dollar is now relative to what it was then. Comparison with some abstract notion of the correct value is irrelevant. Perhaps I misunderstand you though.

I would be interested to know how the rise in oil prices compares to the rise in prices in other important consumer goods. If it's much more, than something other than the exchange rate is probably going on. If it's about the same, then it could be mostly a matter of the change in the exchange rate.

heatkernel said...

I meant "imported", not "important" consumer goods. Lack of sleep and quick typing...

Anyway, even without checking the exact numbers, I'm fairly certain that crude prices have gone up more sharply than the dollar has fallen. Also, not all oil is imported, just some portion So there are other factors involved. But the fall in the dollar's value is responsible for some of the price run-up. The fact that Iraqi oil exports have actually gone down rather than up in the aftermath of our little war can't have helped the situation either. And then there's the instability in other oil producing regions (Venezuela, Central Asia), which must make the traders think of supply disruptions in the future. Those expectations are factored into the price.

george540dylon said...
This comment has been removed by a blog administrator.
Rog said...

That previous comment was stock solicitation spam.

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Notta Libb said...

Check out a funny site dedicated to the absurdity and satire nature of saying "It's All George Bush's Fault!"

http://www.itsallgeorgebushsfault.com

Regards,
Notta Libb