A bit of a rant this morning ...

I've been trumpeting this since the fed start reducing rates by leaps and bounds.  I really don't do "I told you so's" much and I'll try to keep away from that tone, but the cuts are finally being understood by the lame stream media.  Or maybe they simply have run out of things to point the finger at for the "high" price of oil.  Personally, I don't think the price of oil is high enough, but that's a different discussion for a different day.  So now the new and fashionable scapegoat of high oil prices is the fed cutting rates.  You see, apparently inflation is up 100% in this country because that's accounting for nearly all of the increase in the price of oil.  Oh yes, I've heard that the price of oil might be up 10% or so in the last 12 months if it wasn't for the cheapening dollar.

You see, oil is traded in dollars.  Just like an American car is traded in dollars.  Because one country's currency appreciates or depreciates, that typically does not change the price of the good or service dramatically, domestically.  This is one of the benefits of a weak currency if you're a big exporter.  To your overseas customers, the price is getting lower and they're more inclined to buy your product "cheaper".  However, to citizens, the price seems about the same.  If oil were traded in Euros, I could see this argument holding water.  But it's not, so this is simply another ignorant take on the subject.  I don't know how the truth of the matter is so hard to grasp.  It's not Bush, it's not the "greedy oil companies", it's not the devalued dollar, it's simply demand.  Massive economies are coming online and developing economies are becoming developed.

But back on point.  I do agree that the weakening dollar is bad.  I half enjoy that this misdirected accusation is happening because maybe some accountability will be demanded from our reckless fed.