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#1
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Simple economics and the cost to fuel a boat....
While fuel prices are in the news a lot these days, we might do well to
realize that the value of crude oil hasn't really gone up as much as we think- much of the price pain is because the US dollar has gone down. Oil is an international commodity, and the producers can sell it almost anywhere in the world. The US dollar is getting clobbered on foreign exchanges all around the planet. It took $1.60 Canadian to buy a US dollar about a year ago, and it now takes only about $1.20. It's the same with almost all other currencies vs. the dollar. If we're going to buy an internationally marketable resource and pay for it with a declining currency, why should we be surprised if it takes more of those depreciating dollars to buy the same bbl of oil? |
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#2
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#3
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I'm reading in this weeks Time mag which states we only import 42% of our
oil. American oil companies SCREWING Americans! Just like Enron and all the other American companies F'in us! wrote in message ups.com... While fuel prices are in the news a lot these days, we might do well to realize that the value of crude oil hasn't really gone up as much as we think- much of the price pain is because the US dollar has gone down. Oil is an international commodity, and the producers can sell it almost anywhere in the world. The US dollar is getting clobbered on foreign exchanges all around the planet. It took $1.60 Canadian to buy a US dollar about a year ago, and it now takes only about $1.20. It's the same with almost all other currencies vs. the dollar. If we're going to buy an internationally marketable resource and pay for it with a declining currency, why should we be surprised if it takes more of those depreciating dollars to buy the same bbl of oil? |
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#4
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wrote in message ups.com... While fuel prices are in the news a lot these days, we might do well to realize that the value of crude oil hasn't really gone up as much as we think- much of the price pain is because the US dollar has gone down. Oil is an international commodity, and the producers can sell it almost anywhere in the world. The US dollar is getting clobbered on foreign exchanges all around the planet. It took $1.60 Canadian to buy a US dollar about a year ago, and it now takes only about $1.20. It's the same with almost all other currencies vs. the dollar. If we're going to buy an internationally marketable resource and pay for it with a declining currency, why should we be surprised if it takes more of those depreciating dollars to buy the same bbl of oil? Hogwash. Denmark, the Netherlands, and several other countries pay more than $6/gallon for gas. Countries like Iraq pay less than 20 cents. The value of the US dollar has nothing to do with either of those situations. |
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#5
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NOYB wrote: wrote in message ups.com... While fuel prices are in the news a lot these days, we might do well to realize that the value of crude oil hasn't really gone up as much as we think- much of the price pain is because the US dollar has gone down. Oil is an international commodity, and the producers can sell it almost anywhere in the world. The US dollar is getting clobbered on foreign exchanges all around the planet. It took $1.60 Canadian to buy a US dollar about a year ago, and it now takes only about $1.20. It's the same with almost all other currencies vs. the dollar. If we're going to buy an internationally marketable resource and pay for it with a declining currency, why should we be surprised if it takes more of those depreciating dollars to buy the same bbl of oil? Hogwash. Denmark, the Netherlands, and several other countries pay more than $6/gallon for gas. Countries like Iraq pay less than 20 cents. The value of the US dollar has nothing to do with either of those situations. "The value of the US dollar has no bearing on how many US dollars Americans must pay for imported oil"? Did you really just advance such a theory, NOYB? Why would you do that? Could it be because the runaway federal spending by the R majority congress and approved by the R president is one of the primary factors causing our dollar to take a beating? Please explain why the relative value of a nation's currency has no effect on the pricing of imported commoditites (such as gourmet Iraqi hogwash). |
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#6
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wrote in message oups.com... NOYB wrote: wrote in message ups.com... While fuel prices are in the news a lot these days, we might do well to realize that the value of crude oil hasn't really gone up as much as we think- much of the price pain is because the US dollar has gone down. Oil is an international commodity, and the producers can sell it almost anywhere in the world. The US dollar is getting clobbered on foreign exchanges all around the planet. It took $1.60 Canadian to buy a US dollar about a year ago, and it now takes only about $1.20. It's the same with almost all other currencies vs. the dollar. If we're going to buy an internationally marketable resource and pay for it with a declining currency, why should we be surprised if it takes more of those depreciating dollars to buy the same bbl of oil? Hogwash. Denmark, the Netherlands, and several other countries pay more than $6/gallon for gas. Countries like Iraq pay less than 20 cents. The value of the US dollar has nothing to do with either of those situations. "The value of the US dollar has no bearing on how many US dollars Americans must pay for imported oil"? Did you really just advance such a theory, NOYB? Oil prices are based in U.S. dollars. If fifty US dollars buys a barrel of oil, and the dollar's value drops relative to the Euro, then the price of oil appears cheaper to countries that use the Euro. Oil doesn't appear more expensive to people buying it in US dollars! Only supply and demand can do that. Why would you do that? Could it be because the runaway federal spending by the R majority congress and approved by the R president is one of the primary factors causing our dollar to take a beating? A weak dollar is good for trade. We may have some of the highest trade imbalances that we've ever seen...but they're mostly with China. And that's only because China has pegged its currency to the US dollar. If the dollar was strong, the trade imbalance would be even worse because it would cause a larger trade deficit with other countries besides China. Please explain why the relative value of a nation's currency has no effect on the pricing of imported commoditites (such as gourmet Iraqi hogwash). Because the price of oil is based in US dollars. Always. A weak dollar just makes the oil cheaper to other countries. It doesn't make the oil more expensive to the US consumer. However, oil is *not* cheaper to other countries despite the relative strength of their currency. Why? Because the price of oil is a factor of supply and demand (whether that demand is real or perceived)...and not the strength of the US dollar. |
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#7
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NOYB wrote: wrote in message oups.com... NOYB wrote: wrote in message ups.com... While fuel prices are in the news a lot these days, we might do well to realize that the value of crude oil hasn't really gone up as much as we think- much of the price pain is because the US dollar has gone down. Oil is an international commodity, and the producers can sell it almost anywhere in the world. The US dollar is getting clobbered on foreign exchanges all around the planet. It took $1.60 Canadian to buy a US dollar about a year ago, and it now takes only about $1.20. It's the same with almost all other currencies vs. the dollar. If we're going to buy an internationally marketable resource and pay for it with a declining currency, why should we be surprised if it takes more of those depreciating dollars to buy the same bbl of oil? Hogwash. Denmark, the Netherlands, and several other countries pay more than $6/gallon for gas. Countries like Iraq pay less than 20 cents. The value of the US dollar has nothing to do with either of those situations. "The value of the US dollar has no bearing on how many US dollars Americans must pay for imported oil"? Did you really just advance such a theory, NOYB? Oil prices are based in U.S. dollars. If fifty US dollars buys a barrel of oil, and the dollar's value drops relative to the Euro, then the price of oil appears cheaper to countries that use the Euro. Oil doesn't appear more expensive to people buying it in US dollars! Only supply and demand can do that. Why would you do that? Could it be because the runaway federal spending by the R majority congress and approved by the R president is one of the primary factors causing our dollar to take a beating? A weak dollar is good for trade. We may have some of the highest trade imbalances that we've ever seen...but they're mostly with China. And that's only because China has pegged its currency to the US dollar. If the dollar was strong, the trade imbalance would be even worse because it would cause a larger trade deficit with other countries besides China. Please explain why the relative value of a nation's currency has no effect on the pricing of imported commoditites (such as gourmet Iraqi hogwash). Because the price of oil is based in US dollars. Always. A weak dollar just makes the oil cheaper to other countries. It doesn't make the oil more expensive to the US consumer. However, oil is *not* cheaper to other countries despite the relative strength of their currency. Why? Because the price of oil is a factor of supply and demand (whether that demand is real or perceived)...and not the strength of the US dollar. Your reply overlooks the fact that the seller will demand a greater number of US dollars for a bbl of oil when that currency is weak. The exporters of oil make a vast number of purchases in Euros and other currencies that are ascending against the dollar, and want to maintain or increase their own purchasing power when the transaction is completed. Suppose you accepted returnable pop bottles for a filling. Let's say that the deposit refund in FLA is 5-cents a bottle, so if you accepted payment in bottles, I would need to bring in 4000 pop bottles for a $200 drill and fill at your practice. If the depopsit refund dropped to 4 cents (the value of my currency declined) I would need 5000 pop bottles to pay for the exact same work. Yes, the price of oil is express in USD, (for now- may soon be in Euros). But as the purchasing power of those US dollars spent in the international marketplace continues to drop a greater number of them will required for the seller to maintain a consistent purchasing power. |
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#8
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wrote in message oups.com... NOYB wrote: wrote in message oups.com... NOYB wrote: wrote in message ups.com... While fuel prices are in the news a lot these days, we might do well to realize that the value of crude oil hasn't really gone up as much as we think- much of the price pain is because the US dollar has gone down. Oil is an international commodity, and the producers can sell it almost anywhere in the world. The US dollar is getting clobbered on foreign exchanges all around the planet. It took $1.60 Canadian to buy a US dollar about a year ago, and it now takes only about $1.20. It's the same with almost all other currencies vs. the dollar. If we're going to buy an internationally marketable resource and pay for it with a declining currency, why should we be surprised if it takes more of those depreciating dollars to buy the same bbl of oil? Hogwash. Denmark, the Netherlands, and several other countries pay more than $6/gallon for gas. Countries like Iraq pay less than 20 cents. The value of the US dollar has nothing to do with either of those situations. "The value of the US dollar has no bearing on how many US dollars Americans must pay for imported oil"? Did you really just advance such a theory, NOYB? Oil prices are based in U.S. dollars. If fifty US dollars buys a barrel of oil, and the dollar's value drops relative to the Euro, then the price of oil appears cheaper to countries that use the Euro. Oil doesn't appear more expensive to people buying it in US dollars! Only supply and demand can do that. Why would you do that? Could it be because the runaway federal spending by the R majority congress and approved by the R president is one of the primary factors causing our dollar to take a beating? A weak dollar is good for trade. We may have some of the highest trade imbalances that we've ever seen...but they're mostly with China. And that's only because China has pegged its currency to the US dollar. If the dollar was strong, the trade imbalance would be even worse because it would cause a larger trade deficit with other countries besides China. Please explain why the relative value of a nation's currency has no effect on the pricing of imported commoditites (such as gourmet Iraqi hogwash). Because the price of oil is based in US dollars. Always. A weak dollar just makes the oil cheaper to other countries. It doesn't make the oil more expensive to the US consumer. However, oil is *not* cheaper to other countries despite the relative strength of their currency. Why? Because the price of oil is a factor of supply and demand (whether that demand is real or perceived)...and not the strength of the US dollar. Your reply overlooks the fact that the seller will demand a greater number of US dollars for a bbl of oil when that currency is weak. Nope again. What drives the price is competition from competing currencies. Not the deflated value of the dollar. The exporters of oil make a vast number of purchases in Euros and other currencies that are ascending against the dollar, and want to maintain or increase their own purchasing power when the transaction is completed. Suppose you accepted returnable pop bottles for a filling. Let's say that the deposit refund in FLA is 5-cents a bottle, so if you accepted payment in bottles, I would need to bring in 4000 pop bottles for a $200 drill and fill at your practice. If the depopsit refund dropped to 4 cents (the value of my currency declined) I would need 5000 pop bottles to pay for the exact same work. Or I could look towards people paying with pop cans if their value is higher relative to the bottles. |
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#9
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"NOYB" wrote in message nk.net... wrote in message ups.com... While fuel prices are in the news a lot these days, we might do well to realize that the value of crude oil hasn't really gone up as much as we think- much of the price pain is because the US dollar has gone down. Oil is an international commodity, and the producers can sell it almost anywhere in the world. The US dollar is getting clobbered on foreign exchanges all around the planet. It took $1.60 Canadian to buy a US dollar about a year ago, and it now takes only about $1.20. It's the same with almost all other currencies vs. the dollar. If we're going to buy an internationally marketable resource and pay for it with a declining currency, why should we be surprised if it takes more of those depreciating dollars to buy the same bbl of oil? Hogwash. Denmark, the Netherlands, and several other countries pay more than $6/gallon for gas. Countries like Iraq pay less than 20 cents. The value of the US dollar has nothing to do with either of those situations. It is simple economics.....but it is not the value of the dollar against foreign currency........It is supply and demand. Right now, demand is nearly equal to supply, THAT is why the cost has increase so dramatically |
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#10
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P. Fritz wrote: "NOYB" wrote in message nk.net... wrote in message ups.com... While fuel prices are in the news a lot these days, we might do well to realize that the value of crude oil hasn't really gone up as much as we think- much of the price pain is because the US dollar has gone down. Oil is an international commodity, and the producers can sell it almost anywhere in the world. The US dollar is getting clobbered on foreign exchanges all around the planet. It took $1.60 Canadian to buy a US dollar about a year ago, and it now takes only about $1.20. It's the same with almost all other currencies vs. the dollar. If we're going to buy an internationally marketable resource and pay for it with a declining currency, why should we be surprised if it takes more of those depreciating dollars to buy the same bbl of oil? Hogwash. Denmark, the Netherlands, and several other countries pay more than $6/gallon for gas. Countries like Iraq pay less than 20 cents. The value of the US dollar has nothing to do with either of those situations. It is simple economics.....but it is not the value of the dollar against foreign currency........It is supply and demand. Right now, demand is nearly equal to supply, THAT is why the cost has increase so dramatically Because supply can barely keep up with demand, the seller will ask for a greater number of dollars (a variable) against a bbl of oil (a constant) when the dollar is weak. Our irresponsible federal spending spree is destroying the dollar and contributing to the increase in the number of dollars demanded for a bbl of oil. I know that's an uncomfortable fact for some people (who insist the R govt can do no wrong) to accept, but it cannot be ignored. By the way, it looks like we're going to be $8 TRILLION in the hole by late September. Wasn't this bout $5.5 Trillion when Bush took office? Heck, even Bush ought to be able to comprehend VETO, it's only a four-letter word. :-) One of you guys in his "approved audience" ought to send him an email and explain that he can exert some control over congressional spendthrifts, if only he will choose to do so. http://www.brillig.com/debt_clock/ All I can say is thank heaven we have the party that pledged to bring us fiscal accountability and reduce government spending in power. Can you imagine where we'd be if those fiscally irresponsible D's were at the helm? |
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