It isn't oil per se, but the fact that it makes up 50% of our
trade deficits that slams the dollar.
If you want a weak dollar, you run trade deficits. Trade
deficits create a weak dollar. Again, this is why being a debtor
nation destroys the currency.
If some other product or commodity made up 50% of our trade
deficit, then IT's supply/demand dynamic would drive the
dollar...
"If trade deficits are sufficiently large and
unsustainable, economists believe that they will be associated with
a weakening dollar at some future date."
Posted by pthoreson on 11th of Nov 2009 at 04:58 pm
OK, that of course makes sense. But, how do you explain the fact
that the US trade deficit has been shrinking over the past year
while the dollar has been falling?
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Title: For those still confused
Posted by macnsc on 11th of Nov 2009 at 03:48 pm
this might help.
It isn't oil per se, but the fact that it makes up 50% of our trade deficits that slams the dollar.
If you want a weak dollar, you run trade deficits. Trade deficits create a weak dollar. Again, this is why being a debtor nation destroys the currency.
If some other product or commodity made up 50% of our trade deficit, then IT's supply/demand dynamic would drive the dollar...
ECON 101 - trade deficits devalue the currency.
Title: oil scam http://www.philstockworld.com/2009/11/11/goldmans-global-oil-scam-passes-the-50-madoff-mark/
Posted by trevor on 11th of Nov 2009 at 09:48 pm
http://www.philstockworld.com/2009/11/11/goldmans-global-oil-scam-passes-the-50-madoff-mark/
Thanks for posting.
Posted by saturn6 on 12th of Nov 2009 at 01:59 am
Explains a lot.
The link and the qoute
Posted by macnsc on 11th of Nov 2009 at 04:04 pm
The link and the qoute below are from your Friendly San Franciso FED
http://www.frbsf.org/education/activities/drecon/1999/9910.html
"If trade deficits are sufficiently large and unsustainable, economists believe that they will be associated with a weakening dollar at some future date."
http://en.wikipedia.org/wiki/Balance_of_trade
OK, that of course makes
Posted by pthoreson on 11th of Nov 2009 at 04:58 pm
OK, that of course makes sense. But, how do you explain the fact that the US trade deficit has been shrinking over the past year while the dollar has been falling?