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U.S. Energy Prices and the Declining Dollar
On the energy front, we’ve seen several days of declining prices. Oil has led the way, falling from about $146 to $126. Coal and natural gas sold down, as well, as did many energy companies and service firms.
So we’ve seen quite a tumble, led by declining oil. But then again, oil had quite a run-up. I’ve said before that oil was climbing too far, too fast. And over the past few weeks, oil tested the $150 mark. But like Gen. Pickett at Gettysburg, this charge to $150 failed.
What seems pretty clear is that at $140, a lot of things in…
25Jul2008 | Energy and Oil | Comments Off | ContinuedThe Fed’s “Strong Dollar Policy†Actually Isn’t so Strong
Ever since Robert Rubin began the tradition in the mid-1990s, it has been a significant element of the U.S. treasury secretary’s job to continuously state that a strong dollar is in the national interest. It is widely regarded that such utterances, if repeated often enough, can constitute the sum total of what is still laughingly known as the nation’s “strong dollar policy.â€
Over the past two generations, the American government has launched many failed “campaigns.†To list just a few, there has been the “War on Drugs,†the “War on Poverty,†and the continued attempts to improve education. But the…
11Jun2008 | Money Morning | Comments Off | ContinuedA Currency Conundrum: Beware of the U.S. Dollar’s “Head Fake†Rally
Don’t mistake the U.S. dollar’s recent rally for strength. If anything, it’s a head fake of legendary proportions.
In fact, the dollar’s recent run-up is actually a warning that risks are escalating.
To better understand what I mean here, let’s look at the greenback’s recent performance against the euro. After bottoming at an all-time low of $1.6019 versus the euro on April 22, the dollar has soared nearly 4% and was trading at $1.5428 per euro early yesterday (Wednesday).
Now many of the Wall Street types expect that rally to continue. Just yesterday, UBS AG (UBS) predicted the greenback would rise to $1.47…
8May2008 | Money Morning | Comments Off | Continued
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