Tuesday, March 01, 2011

The Continuing Crisis...

With fuel prices so high, it is unlikely we are in for a real economic recovery just yet:

The President and some members of his party want us to think that this is because of "greedy oil companies." In fact, the economic situation we are seeing could be the beginning of a more lengthy economic process wherein we see the price of fuel rise-and as a result nearly everything else as well-because nations around the world are slowly becoming less dependent upon the U.S. Dollar as their reserve currency. If the exporters of major commodities which our country imports-including oil-begin to demand payment for those commodities en masse in something other than the Greenback, we will see prices on nearly everything go through the roof. The fact that our federal government simply prints more money to keep pace with its debts and can afford to do this because of the Dollar's status as the world's reserve currency exacerbates the potential problem. If the Dollar ever loses that status-a prospect that isn't so far-fetched anymore with China signaling that it intends to move away from large-scale government purchases of U.S. Treasury bills.

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