Letter to the Editor
Published: March 13, 2008

Editor:

This is an update of a letter I wrote to The Madison County Eagle several years ago. I warned at the time that as the U.S. continued its weak-dollar policy, the price of oil and other imports would continue to rise. As I recall, that letter dealt with several other subjects. This update deals only with oil.

In 2001, as G.W. Bush took office, the Euro was valued at 88 cents. Today it is worth $1.55. That is, the Euro has appreciated 76 percent against the dollar. In 2002, then Secretary of the Treasury Paul O’Neil let slip that the U.S. was no longer interested in a strong dollar policy. He was forced to resign for that little slip of the lip.

Weakening of the currency is the sort of move third world countries use to give themselves a competitive advantage. It raises the price of imports, and lowers the price of exports.

And this would be all well and good, except for one “tiny” fact. We do not export any oil. Oil is an import. So, just naturally, the price of oil would have to increase.

Of course, the dollar exchange rate is not the only factor involved in the increase. There’s also growing worldwide demand, a natural force that we cannot control. But there’s also what may euphemistically be called “trouble in the middle east,” the occasional “minor conflict” that typically puts short-term pressure on the price of oil. Unfortunately, the Bush administration found a way to make the “minor conflict” permanent. Price of oil to follow.

As you Exxon stockholders watch the price of oil creep ever upward, don’t fail to send thank you notes to the current occupant of the White House. Without him, why, who knows, oil might still be $40 a barrel, and there would go your profits.

(What? You’re not Exxon stockholders? Oops.)

Frank Dixon
Criglersville