I live a small life here. I am struggling to understand currency values and markets. My gut reaction to the rise in value of the Dollar Index, now 99.4 cents, seems good to me, like stock in my country rising. I know it makes exports harder to sell in the world. Perhaps instead of buying back their own stock, U.S. companies should be buying stock in cheaper European companies stocks. U.S. stock will drop relative to Europe because of the European Quantitative Easing. But if we change the law about exporting crude, we could keep the world price of crude from rising so quickly but also help our exports, and also helping the U.S. consumer. Win and Win. I did know that China’s yuan is linked to our dollar! That may slow down their exports but they can buy commodities much cheaper, since they must import most of their commodities.
Among the loosers in a stronger dollar, and more exports of crude will be Russia. Another win to my mind. Cheaper oil will weaken Iran, and other Middle Eastern countries. Another win as they are funding their nuclear aspirations along with much of the insurgency in the Arab world. Letting them up from the trade restrictions would be a big mistake. We need to do all we can to weaken Iran. It is hard to get one’s arms around this concept without a world economic computer model. Crude is valued in dollars so that helps Russia and Iran. We need to flood the world marke with crude. To make it even more complicated, our country lost the 30,000 oil patch jobs that we added last year due to the drop in crude prices.
I am still going with low price crude and exports, strong dollar.
Gasoline moved up 2.0 cents/gallon at the average rack in selma. Diesel fuel went up by 1.46 cents/gallon. Crude is up 39 cents to $52.03/barrel. Prices are:
Have a great day,