Big US deficit= higher oil prices

[Lorien]

That was the conclusion David Brauncacchio came to tonight on Bill Moyer's NOW. The * administration's record budget deficit makes foreign investors nervous, which drives down the value of the dollar. Oil is traded in US dollars, therefore foreign producers need to raise prices in order to keep the value of oil stable in their own currencies. So yes, high gas prices ARE Bush's fault!

[kalian]

1. Interesting theory....

its quite plausible but I do tend to subscribe more to the peak oil
theory. Oil is a finite resource...and extracting more and more
for the increased demand is becoming ever more expensive.

[lastknowngood]

2. Gas prices are the same as the last two years all you have to

do is convert it into euros. The value of the dollar has fallen 30% in the last two years, if you do the math were right where we should be. Also there is no difference in the supplies now than it was last year or the year before. It varies no more than 1% so realize were looking at the price of a cheep dollar.

[Lorien]

10. Now if we could just get

the rest of America to understand this (it's a simple enough concept. after all). This stuff would make a GREAT campaign or MoveOn ad!

And to top it all, OPEC says it's cutting production because there's a glut of oil out there?

[Kathy in Cambridge]

3. Yes-I saw that too

and I've read that a few other places. What until the big oil producers start using Euros as the standard. We'll be in deep doo doo then!

[Lorien]

5. Wasn't a possible switch to Euros

one of the reasons Smirk and his junta were in such a hurry to invade Iraq? I think I read somewhere that Saddam had been talking about making just such a switch.

:shrug:

[scarletwoman]

6. Saddam actually DID make the switch,

in December 2000. One of the very first acts of the Occupation was to switch oil payments back to dollars.

We had some excellent threads on this very subject, pre-invasion -- but all those links are archived over at DU-1.

sw

on edit: here's a GREAT article about Iraq, Euros, and the real geostrategic reasons for the invasion:

http://www.ratical.org/ratville/CAH/RRiraqWar.html#p1

<snip>

"Saddam sealed his fate when he decided to switch to the euro in late 2000 (and later converted his $10 billion reserve fund at the U.N. to euros) -- at that point, another manufactured Gulf War become inevitable under Bush II. Only the most extreme circumstances could possibly stop that now and I strongly doubt anything can -- short of Saddam getting replaced with a pliant regime.

"Big Picture Perspective: Everything else aside from the reserve currency and the Saudi/Iran oil issues (i.e. domestic political issues and international criticism) is peripheral and of marginal consequence to this administration. Further, the dollar-euro threat is powerful enough that they will rather risk much of the economic backlash in the short-term to stave off the long-term dollar crash of an OPEC transaction standard change from dollars to euros. All of this fits into the broader Great Game that encompasses Russia, India, China."

[Lorien]

9. Thanks Scarletwoman!

I think I read a few of those threads, but with all this information one gets loaded up on around here, it's hard to keep info straight in my brain's archive, lol!

Thanks for the article; really helps to pull it all together, doesn't it?

[scarletwoman]

4. I loved his closing statement:

After pointing out the relationship of bush's tax cuts to the deficit, he said something like: "Bush may as well have skipped the tax cut and just sent all the money directly to the oil producers." Ouch!

sw

[Indiana_Dem]

7. Here is some good info on the subject:

Global Economy
http://www.atimes.com
SPEAKING FREELY
US complicit in its own decline
By W Joseph Stroupe

Speaking Freely is an Asia Times Online feature that allows guest
writers to have their say.

China is rising, economically, diplomatically and militarily, to
threaten a displacement of the United States as the dominant power in
Southeast Asia. Europe is increasingly choosing the course of
independence from the US: it currently rivals US gross domestic
product (GDP) and is making joint economic and strategic diplomatic
agreements with US competitors Russia, China, India, Iran and others,
while the US looks on warily.

South Korea is increasingly irritated with the US military presence
and diplomatic posture on the Peninsula and is looking ahead to a
settlement of the Korean crisis that could significantly lessen, if
not eliminate, US presence and influence. Japan likewise is
displaying increasing irritation with the US diplomatic posture and
military presence in the region and is moving rapidly in the
direction of remilitarization, independence and self-assertion,
making its own energy-security deals with Iran and Russia over US
objections. Taiwan is also becoming more assertive, risking a
conflagration with China, and obliging the US to make diplomatic
moves toward China, away from longtime ally Taiwan, in an effort to
avoid the conflagration, in which the US would most likely be the
prime geopolitical loser.

Russia, in the face of proliferating US military presence throughout
the traditional Russian sphere of influence, is becoming much more
assertive, charting a course often directly opposed to the US. Russia
is making strategic economic (oil/gas) agreements and conducting
weapons sales in every strategic region of the world, while the US
looks on guardedly at Russian political and diplomatic influence on
the rise.

----------------------------------------------------------

The perfect storm that's about to hit
Rising oil prices and a weak dollar could shatter the global economy

http://www.guardian.co.uk/print/0,3858,4886729-103677,00.html

Jeremy Rifkin
Wednesday March 24, 2004
The Guardian

--------------------------------------------------------------

[DeepModem Mom]

8. kick