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When Bush took office...
"Wayne.B" wrote in message ... On Sat, 10 Nov 2007 22:49:44 -0500, " JimH" ask wrote: Explain how the "Republicans" caused the increase in gasoline prices. That's easy: - The Iraq war - Huge federal defecits - Weak dollar - Poor energy policies - Huge trade imbalance They are all intertwined with high energy prices in various ways. Well put. And to pay for it the fed "created" too much money diluting the greenback. Supply and demand. Oversupply of currency and far too low interest rates generally mean lower value of the currency itself. But I think most of us didn't anticipate the size and speed of the devaluation of the USD. As this moves through the supply chain it is going to drive a mean kick on inflation and probably interest rates too. Sub-prime for example. Who wants risky debt, liquidity issues for an interest rate below inflation? But if they jumped rates to 12+% the cash would come. Rates are artificially low. That is why there is a crunch. Most people should think of paper currency just like stock. And devaluation depreciates the stock it is going to take more stock to buy the same other item as it did before. You feel it first with gasoline as inventories are short. The real value of oil has not changed that much in a year. |
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