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Dollar Drops Further -- Oil Prices Soaring
Dear friends,
The Department of Energy released a report this morning that sent Oil futures skyrocketing. The weak dollar continues to add fuel to the fire.
The value of the U.S. Dollar is falling rapidly again today, causing oil producing nations to demand more U.S. Dollars for each barrel of oil. This downward trend, in the value of the U.S. Dollar, has been going on since the "War on Terrorism" started.
The Fall of Rome?
For more news on this story, please visit the following link.
Joel
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Dollar Drops Further -- Oil Prices Soaring
Murf,
There are many people in the U.S. who believe that the high price of oil is caused by an "oil shortage". Nope. There is no oil shortage. Everyone has all the oil they can get their hands on. There are no lines at the pumps, because every station has plenty of gasoline, and there's no threat of it running out.
The sudden increase in oil prices -- from about 45 dollars per barrel during Clinton's terms in office, to now over 135 dollars per barrel, just 10 years later -- is mostly due to the SHARP drop in the value of the U.S. Dollar.
Oil, throughout the world, is sold in U.S. Dollars. The Dollar is the basis for the price of oil, world-over. However, the Euro recently took off. The Dollar is now weaker than the Euro by a WIDE margin....and it continues to fall.
Due to the higher value of the Euro, oil producing nations are demanding more U.S. Dollars in order to make up the difference.
War is a very expensive undertaking. Wars require huge sums of money, which brings on debt. The resulting debt severely harms the value of the war-making nation's currency. This war on terrorism has caused more harm to the people of the world than any raghead and his friends ever could.
Joel
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Dollar Drops Further -- Oil Prices Soaring
Kwschumm,
It is true that the eco-kick, nut-jobs have hindered many oil exploration projects. They've made it nearly impossible for investors in such projects to ever get a dime back on their investments, due to delays concerning environmental impact studies, lawsuits, etc. This fact does not have any impact on the recent spike in oil prices, however.
The two biggest factors, regarding the price of oil on the world market, are high increases in usage by China and other up-start industrial nations, which creates additional demand for the oil -- coupled with the falling value of the U.S. Dollar.
The U.S. Federal Government is very fearful that the OPEC nations will soon stop accepting the U.S. Dollar as payment for oil. There's a whole lot of talk in the middle east that those nations may soon start demanding payment in Euros. If that happens, the price of a barrel of oil, here in the U.S., will jump MUCH higher.
There's talk on Wall Street that some nations are already basing their oil sales on the value of the Euro, even though those foreign governments have not yet officially announced the change......possibly because of fear of U.S. retribution.
Joel
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Dollar Drops Further -- Oil Prices Soaring
Kthompson,
Debt is the result of too much spending........and NOTHING costs more than fighting a war.
Over the past several years, the Federal Reserve has continued to print more and more money, in order to help feed a very hungry Federal Government, who can't seem to get enough money to feed itself and its expensive habits.
This HUGE increase in the money supply (M3) has driven down the value of the U.S. Dollar, to near record low levels.
On the brighter side..........
The Federal Reserve announced this morning (Thursday June 12th) that the high inflation rates are we are currently experiencing are a result of too much cheap money. Therefore, the Fed is making plans to increase interest rates in the coming months, but possibly not until after the national elections are held, this coming November.
This is good news. Higher interest rates make the U.S. Dollar harder to get our hands on, and therefore drives up its value. The U.S. Dollar is STRONG this morning.......way up against both the Euro and the Yen.
The stronger U.S. Dollar also plays a major role in the price of crude oil, which is also down by over 3 Dollars per barrel in early trading today.
Joel
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Dollar Drops Further -- Oil Prices Soaring
Murf,
If we look carefully at the numbers you posted, (by the way, Thank You!) we will see that the U.S. Dollar is worth roughly 60% of what it was in 2001.
During these past 8 years, world-wide oil consumption has increased by a substantial margin. This fact, alone, would account for about half of the increase in price of a barrel of oil.
The other (roughly) half of the increase can be accounted for with the drop in value of our purchasing power......a worthless U.S. Dollar.
Since the early 1950s, ALL oil on the world market has been priced in U.S. Dollars. (Partly because we demanded this from the oil producing countries.) This is no longer the case. Iran (now U.S. enemy #1.) is selling oil based in Euros. This, more than anything else, has the U.S. government throwing a tirade!
Please visit the story at the following link, by Steve Austin. Iranian Oil Bourse Opening, dated Feb. 6th, 2008.
Joel
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Dollar Drops Further -- Oil Prices Soaring
Murf,
I need to fix up a mistake I made in my earlier message.
U.S. Dollars have been the only accepted form of payment for ALL oil on the world market, since 1971.
Ooops. My error.
Joel
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