US Dollar Chart, evening of Sunday, March 16, 2008
Crude Oil Chart, evening of Sunday, March 16, 2008
Crude oil has once again hit another all-time high price tonight of $111.40, while the US Dollar Index has set a new all-time low at $71.30. The closing price of crude oil on Friday is so far off this chart (I marked it with a blue line, just as the price of gold was marked on my next posting), it literally doesn't even show up on this chart! All three of the following articles indicate that the US Dollar and the price of crude oil are directly and inversely related (as if we need to be told -- just look at the above charts for the two Sunday evening). This should be no surprise, since crude oil futures contracts globally are linked to the US Dollar. The lower the US Dollar goes, the more of them it will require to buy one barrel of crude oil. Time to write the Congressmen, America! The Fed is trying to inflate its way out of a sinking economic crisis!
Oil Prices Hit All-Time High
Oil Rises to New Record As Dollar Drops
Oil Rises to Record As Investors Buy Commodities on Dollar Drop
Here is another very interesting article that suggests that higher inflation and the tanking stock market in the United States are directly linked. The author makes a good argument that the companies whose earnings are being hurt by Fed rate cuts are the ones that are being delivered a knock-out blow by the tanking US Dollar and rocketing commodity prices, which, or course, are the direct result of the Fed's rate cuts. In other words, the Fed rate cuts are literally feeding a downward spiral. Interesting analysis!
Will Further Fed Cuts Exacerbate the Problem?
Sunday, March 16, 2008
Costly Crude, Dumpy Dollar
