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  • From: "Don Bowen" <don.bowen AT earthlink.net>
  • To: <homestead AT lists.ibiblio.org>
  • Subject: Re: [Homestead] Fuel price perspective
  • Date: Sat, 31 May 2008 09:02:30 -0700

I heard a financial talk show host that blames the price of fuel, at
least in part on the weak dollar. Almost never, do I hear anyone
blaming the poor value of the dollar on oil prices.

The dollar slide has had a huge affect on oil prices. (one dollar = .643 Euro) Oil producing countries are charging more to make up the difference. Oil prices are given in dollars but some countries are charging in Euros, most notable Iran and Venezuela. Other countries are exploring dropping the dollar in favor of the Euro or a market basket of currencies. The market basket approach allows them to pick and choose the best rates. If either of those approaches were chosen over the dollar you could expect even further slides in the dollar, the need for oil importing countries to purchase dollars is one thing propping it up..

The dollar is down for many reasons. A big one is the rest of the world looking at out unified budget debt and cringing. That debt is somewhere around $18T and growing. Other things like the credit crunch are adding to world wide worries and the Iraq quagmire looks to be another huge drain on our economy. Inflation worries are also making our currency less than desirable on world markets.

Don Bowen KI6DIU
http://www.braingarage.com/Dons/Travels/journal/Journal.html




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