Homestead mailing list

[Don Bowen KI6DIU <don.bowen AT earthlink.net>]

At 10/18/2007, you wrote:

> Don, while I agree that this is a sure sign to get the homestead in order,
> the two have something to do with one another.  In the past the Saudis have
> matched US interest rates to keep the petro in the petro-dollar.  This 
> time they
> didn't, would have been fools to do so.  So some of the increase in oil 
> prices
> is actually a decrease in the value of the dollar.  Not that that does us any
> good.

The fall of the dollar has a direct direct affect on the price of oil to 
us.  Oil has been priced in dollars for years but with the fall, oil 
producing countries are moving away.  They have no real confidence in our 
economy.  The fall of the dollar was precipitated by the 50 basis point 
drop in the prime and many observers that this next week will see a 25 
point drop.

> IF they could.  However if OPEC is at near peak capacity now, as some
> suggest, they can't significanly increase production and therefore have no 
> power to
> restrain anything.  Not only that, OPEC knows full well that all the 
> alternate
> energy in the world doesn't add up to a tiny fraction of the oil used each 
> day.

OPEC is not able to keep up with demand, as one observer said "The 
producing countries are facing certain strains."  Peak production was in 
May of 2005 at 85 BBD and demand has risen to 88 BBD since.  Our gun happy 
administration is not helping at all, one observer said that the day you 
hear that Iran was attacked is the day when oil will reach $100.



Don Bowen              Awl Knotted Up                       KI6DIU
http://www.braingarage.com