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Banned
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Originally Posted by alansmithee
Actually, the lowering of the dollar isn't as big a problem for the US as it is for the rest of the world, at least as far as trade is concerned. It makes US products cheaper in comparison to the rest of the world's, which other countries have problems with. This can also be seen in China, which has been accused of artificially lowering their currency's value to stimulate trade.
And the rising price of oil has hurt the EU's economy more than it has America's, because oil prices are based on the dollar. OPEC needed to raise prices to compensate for the devaluing of the dollar.
The reason I believe that reducing reliance on oil isn't higher priority is because there's no need yet. There are still vast oil reserves, many untapped. From a business perspective it's more expensive trying to develop new energy technologies than relying on oil.
National finances are quite separate from personal finances. In personal finance, borrowing can be seen as a sign of weakness, whereas that's not the case for national finance. Also, there is really no way to collect on national debt, because it's allocated throughout many places. It's on a totally different level.
As for debt reduction not being a higher priority, again I don't think it's seen as a large problem. And even if it was, it's hard to explain macroeconomic theory to the masses in a way that it could be traded on for political capital.
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Opinions, alansmithee, or do you have sources to post to substantiate your assertions in your last post ? I disagree with much of what you posted.
I submit that compared to the U.S., countries that use the Euro as their
currency have experienced only a small fraction of the increased expense of
oil imports, when compared to oil prices and currency values four years ago.
As you can see, if the numbers below are accurate, U.S. currency has already collapsed. It can be argued that U.S. equity market indexes (Dow 30, Nasdaq 2000, S&P 500) only appear to be "up" when observed by people who live in the U.S........ Equity indexes, just like barrels of crude oil , have been "re-priced" to reflect the collapse of the U.S. dollar value. When viewed in Euros, the values of U.S. equity indexes have dropped in half since the 2000 presidential election.
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<a href="http://www.td.com/economics/global/gm1204.pdf">http://www.td.com/economics/global/gm1204.pdf</a>
pg. 9
The euro continued its ascent versus the U.S. dollar in
November abd early December, rising by another 4.4 percent
to nearly 1.345 USD/EUR at one point- a move thattook the
currency mmore than 60 per cent above its October 2000
all-time low of 82.7 U.S. cents.
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<a href="http://www.google.com/search?hl=en&q=Oil+valued+in+dollars+is+up+20%25+versus+its+peak+in+2000%2C+but+when+valued+in+euros%2C+the+price+of+oil+has+fallen+by+20%25.&btnG=Google+Search
">Oil valued in dollars is up 20% versus its peak in 2000, but when valued in euros, the price of oil has fallen by 20%</a>
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<a href="http://www.technologyreview.com/articles/05/02/issue/review_oil.asp?p=0
">http://www.technologyreview.com/arti...ew_oil.asp?p=0
</a>
The End of Oil?
By Mark Williams Febuary 2005
If the actions—rather than the words—of the oil business’s major players provide the best gauge of how they see the future, then ponder the following. Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.
If those clues weren’t enough, here’s a news item that came out of Saudi Arabia on March 6, 2003. Though it went largely unremarked, the kingdom’s announcement that it could not produce more oil in response to the Iraq War was of historic importance. As Kenneth Deffeyes notes in Beyond Oil: The View from Hubbert’s Peak, it meant that as of 2003, there was no major underutilized oil source left on the planet. Even as established oil fields have reached their maximum production capacity, there has been disappointing production from new fields. Globally, according to some geologists’ estimates, we have discovered 94 percent of all available oil........
.........................The prognosis? Deffeyes has no doubt that by 2019, the year in which Hubbert’s theories indicate global oil production will drop to 90 percent of current rates, human ingenuity will have found replacement energy sources (see “What Energy Crisis?”, p. 19). But Deffeyes is optimistic about the long term only because he believes that by 2010, pressures will grow so intense that they’ll create the resolve necessary to develop a new energy *economy. In the short term, he foresees continually rising oil prices that force industry after industry closer to the wall. He fears not just escalating resource wars around the world but also mass starvation in some countries, since the 6.4 billion people living on the earth today are fed thanks largely to the successes of the 20th century’s “green revolution,” which, among other innovations, brought petrochemical-based fertilizers into wide use.
Because 15 years ago we failed to begin developing the new energy sources and technologies we need now, Deffeyes argues, in the immediate future we’ll have to rely on what we’ve got. In Beyond Oil, he examines how we might optimize the use of our geologically derived energy sources..................
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<a href="http://www.gravmag.com/oil.html">http://www.gravmag.com/oil.html</a>
US OIL DEMAND, 2004: Over 20 million barrels per day, up from January 2002, when demand was about 18.5 million barrels per day, = 777 million gallons.... .....55-60% of US consumption is imported at a cost of $50 billion+ per year, amounting to the largest single element of our trade deficit. In summer 2004, thanks to higher prices, increased demand, and lower production, record trade deficits of more than $50 billion per month were recorded, with approximately 30% of that attributable to imported energy costs. In September 2004, the US reported its lowest montly oil production in 55 years, at an average of 4.85 million barrels per day.
In March 2004, the total trade deficit was about $46 billion for the month, and oil imports were about 11 million barrels per day x $40 per barrel x 30 days per month = $13.2 billion, or about a quarter of the total trade deficit for the month. If March served as an average for the year, the total value of oil imports for 2004 would be about $156 billion — but this number depends on volume of imports (which is unlikely to decrease) and price of oil (which is likely to fluctuate).
US PRODUCTION, early 2002: About 5.9 million barrels of oil per day, plus about 2 million barrels of natural gas liquids and condensate; and 55 billion cubic feet of gas per day. Oil production is a decline from 8-9 million b/d in 1986.
WORLD PRODUCTION/CONSUMPTION: Production in 2000-2002 was about 75 million barrels per day, about equal to the world consumption of about 27 billion barrels per year. Consumption is increasing at a faster rate than the increase in production.
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alansmithee, I can see the consistancy in the points you tried to make in your post, with what I perceive to be your political philosophy and sympathies. I see a U.S. administration that continues to passively observe a currency collapse that was signifigantly aggravated during it's tenure. I see no effective policy to encourage energy efficiency or to discourage domestic consumption. Monetary policy seems to consist of escalating federal borrowing and unrestrained creation of new consumer and corporate credit.
Please stop posting opinion with no references that can be fact checked. |