Overreacting to gas prices
#181
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Originally Posted by rai,Jul 9 2008, 04:33 AM
again, there is no reason to suggest oil will hit $200 a barrel any time soon, oil just went down $9 a barrel in the last 2 days seems to me the top is here or near.
#182
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Originally Posted by marthafokker,Jul 7 2008, 04:14 PM
As long as the dollar is weak, oil price will continue to go up.
Have you seen all the foreigners in US shopping now? They are having a hell of a time getting US goods at a discounted price.
Just like Japaneses did in the late 80s. Just that, this time.... they are Russians and Middle East folks with their oil money.
The Feds need to start raising their Interest rates soon, or we will have more worries than just gas prices.
Have you seen all the foreigners in US shopping now? They are having a hell of a time getting US goods at a discounted price.
Just like Japaneses did in the late 80s. Just that, this time.... they are Russians and Middle East folks with their oil money.
The Feds need to start raising their Interest rates soon, or we will have more worries than just gas prices.
Why would we want interest rates higher? I'd rather have cheap money and expensive gas than expensive money and expensive gas. A rising dollar might help a little with the gasoline prices, but the price of the crude is only a part of what you pay for when you fill up.
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Originally Posted by Saki GT,Jul 9 2008, 07:39 AM
I'm one of those people that believes that once we have a new president, confidence in the United States will improve and so will the dollar, making thins easier for everyone.
#184
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Originally Posted by Slithr,Jul 9 2008, 12:55 PM
Why would we want interest rates higher? I'd rather have cheap money and expensive gas than expensive money and expensive gas. A rising dollar might help a little with the gasoline prices, but the price of the crude is only a part of what you pay for when you fill up.
#186
LOL @ regime change.
#188
On that low dollar...
Currently, the government has tax rates relatively low, and interest rates are low also. Cheap money and low taxes both act to increase money velocity (how many times it changes hands) and stimulate the economy. Govt tax revenue remains steady so long as lower tax rates are offset by increased spending, so they aren't in danger as long as we SPEND SPEND SPEND. Businesses enjoy the lower taxes, sell more stuff, and if growth is steady and not too rapid, these business will initially create more jobs and after that start to bid higher wages for labor. (hmm... no wonder we have so much debt--it fits well within the US economic model!)
A few benefits of a low dollar on the US economy:
1. drives down labor costs in the US, which will subsidize domestic work for international companies and act to increase the demand for US labor
2. increased exports and decreased imports, which keep money moving within the US instead of leaving
3. manufactured goods see price drops (esp in foreign markets) as their manufacture becomes cheaper; sales increase due to increased exports
A few costs of a low dollar on the US economy:
1. increased cost of imports, especially imported raw goods (such as gas) that cannot be produced domestically
2. the domino effect of this can be quite significant (ie food prices due to transport prices due to oil prices)
Clearly, the cost of raw goods is not important until we have jobs and spend our money. You can't buy gas if you don't spend money, regardless of the price. However, after we are all spending money, the cost of raw goods starts to balance with the cost of labor, and an imbalance will curtail economic growth. Whether we need to subsidize the raw goods side or the labor side to hit that sweet spot is always the question of the day.
I think it's clear that Bush wants to prevent a recession. Wrong or right, if he's convinced we should compromise raw good costs to decrease labor costs, he would be a fool NOT to actively deflate the dollar in an effort to help stimulate the economy.
sidebar: a possible political agenda:
through a low dollar, europe pays for the war and peacekeeping efforts in the middle east through the exchange rate. they sell us no raw goods, but they pay a currency tariff (exchange rate) on their goods and purchase more of our subsidized (exchange rate) goods, thus funding our economy and paying our taxes.
Currently, the government has tax rates relatively low, and interest rates are low also. Cheap money and low taxes both act to increase money velocity (how many times it changes hands) and stimulate the economy. Govt tax revenue remains steady so long as lower tax rates are offset by increased spending, so they aren't in danger as long as we SPEND SPEND SPEND. Businesses enjoy the lower taxes, sell more stuff, and if growth is steady and not too rapid, these business will initially create more jobs and after that start to bid higher wages for labor. (hmm... no wonder we have so much debt--it fits well within the US economic model!)
A few benefits of a low dollar on the US economy:
1. drives down labor costs in the US, which will subsidize domestic work for international companies and act to increase the demand for US labor
2. increased exports and decreased imports, which keep money moving within the US instead of leaving
3. manufactured goods see price drops (esp in foreign markets) as their manufacture becomes cheaper; sales increase due to increased exports
A few costs of a low dollar on the US economy:
1. increased cost of imports, especially imported raw goods (such as gas) that cannot be produced domestically
2. the domino effect of this can be quite significant (ie food prices due to transport prices due to oil prices)
Clearly, the cost of raw goods is not important until we have jobs and spend our money. You can't buy gas if you don't spend money, regardless of the price. However, after we are all spending money, the cost of raw goods starts to balance with the cost of labor, and an imbalance will curtail economic growth. Whether we need to subsidize the raw goods side or the labor side to hit that sweet spot is always the question of the day.
I think it's clear that Bush wants to prevent a recession. Wrong or right, if he's convinced we should compromise raw good costs to decrease labor costs, he would be a fool NOT to actively deflate the dollar in an effort to help stimulate the economy.
sidebar: a possible political agenda:
through a low dollar, europe pays for the war and peacekeeping efforts in the middle east through the exchange rate. they sell us no raw goods, but they pay a currency tariff (exchange rate) on their goods and purchase more of our subsidized (exchange rate) goods, thus funding our economy and paying our taxes.
#189
sorry, that was pretty OT. i threw it in a new thread in politics and current events:
https://www.s2ki.com/forums/index.ph...f=130&t=613577
https://www.s2ki.com/forums/index.ph...f=130&t=613577
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