Posted on 11/03/2007 5:04:16 PM PDT by E. Pluribus Unum
(Fortune Magazine) -- We're hard-wired to tremble when oil prices rocket, and the past few weeks have looked like another example of why. Whenever stocks fell sharply, as they did several times, traders blamed the fast-rising price of oil.
But that chain of logic is misleading. The bigger picture shows that the relation between oil and the economy is changing, and we'll have to rewire our brains to understand what's happening. Watching oil prices rise and fall is no longer enough; the key now is understanding why they're moving.
(Excerpt) Read more at money.cnn.com ...
Oil is at $90+ per barrel because the dollar isn’t worth $—t anymore.
It’s always bad if I have to pay more for it, no matter how you “spin the story” in the news article... LOL!
Of course there is a lot of demand pressure too, but the low dollar has a lot to do with near $100 oil.
Oh, the humanity!
Speculators are driving the oil and most commodity markets, not fundamentals. Oil was below $50 last December and very likely will be again this December. Volatility is the name of the game.
Then why did the US Dollar drop 40% vs the Euro as we raised interest rates 15 straight times?
Because we were and are spending dollars like drunken sailors. Now we have lower interest rates to boot which does two things: 1) It cuts the utility of the dollar itself; and, 2) It encourages more spending.
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