More from Hampton’s article, “Surely, if the dollar was losing its value, the Middle East would want to see a higher dollar oil price, to maintain the spending power of those dollars. ”
Do you think that the dollar’s 33% drop in the last few yaers caused the rise in oil prices during that time?
It may not have a 1-1 correlation, since oil is affected by traders and geopolitical risk, and the Katrina hurricane, but in general, when the dollar continues falling, oil producing nations will raise their prices so they don’t lose purchasing power, and our recession will be exacerbated.
I think someone ought to start a new thread about possible diversification techniques. Those of us on piggington, who are aware of the looming problem, have no excuse to be caught blindsided. At least we should have some discussion, and then it is up to each of us whether we profit or lose from this transition.
In related news, the european yield curve briefly inverted yesterday by one basis point, and the UK and US yield curves are fully inverted. Japan’s manufacturing and capital spending orders are down. The recession is starting to rear its head in other places.
