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Oil, Dollars, speculation, and Sprawl

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  • Richard Risemberg
    ... And a link: http://www.truthout.org/docs_2005/082105A.shtml Richard
    Message 1 of 1 , Aug 22, 2005
      A quote:

      > There has been a growing dollar glut in the world. Now, China and
      > Saudi Arabia have no reason to either consume too much or to dump
      > dollars wholesale; it would hurt them more than it would help them.
      > Their willingness to park dollars in low interest rate treasuries
      > is what keeps the whole system afloat. As long as there was no
      > "gold window" in which those betting against the US currency could
      > cash out, the federal deficit and trade deficit could seemingly
      > float in mid-air.
      > However, there is a gold window, or rather, a black gold
      > window: oil. You see, oil is cheap compared to what you can do with
      > it. Specifically, you can build houses farther out and speculate on
      > real estate, and you can move production to cheaper areas and ship
      > the goods. The bigger the difference between the price of oil and
      > the profits from moving housing and production, the bigger the gap.

      And a link:


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