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November 03, 2008

Comments

ML Harris

First, a strong dollar fixes a good bit of the oil price issue. Oil, the world over, is dollar denominated, so a strong dollar buys more foreign currency, and lowers prices. And, as we've seen, gas prices and oil prices have dropped since the wall street bailout. And, if you track exchange rates, the Dollar is back on top of the Can Dollar, and the Euro is back to 2004 levels, while the GB Pound is back to 2003 pricing. Since England is priced for a $1.90 pound, it's like the whole country is having a 15% off sale.

Doing more strong monetary policy will go a long way to drop oil prices and fix the dollar at maybe $1.20 to the Euro and maybe $1.45 to the GBP and $.70 to the Canned Dollar. Something to increase government revenue without increasing spending would be worthwhile, as it would allow the US to retire debt and regain control over the money supply. And really, the supply is the key thing here.

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